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Multiple Choice QuestionJohnson Company has the following overhead costs: machine setup $25,000; factory services $10,000; design of $15,000; and selling expenses of $5,000. What is the total overhead costs using activity-based costing?Multiple choice question.$50,000.$40,000.$20,000.$55,000.

Question

Multiple Choice QuestionJohnson Company has the following overhead costs: machine setup 25,000;factoryservices25,000; factory services 10,000; design of 15,000;andsellingexpensesof15,000; and selling expenses of 5,000. What is the total overhead costs using activity-based costing?Multiple choice question.50,000.50,000.40,000.20,000.20,000.55,000.

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Solution

To calculate the total overhead costs using activity-based costing, you need to add up all the overhead costs mentioned.

Here's how you do it:

  1. Machine setup cost: $25,000
  2. Factory services cost: $10,000
  3. Design cost: $15,000
  4. Selling expenses: $5,000

Now, add all these costs together:

25,000(machinesetup)+25,000 (machine setup) + 10,000 (factory services) + 15,000(design)+15,000 (design) + 5,000 (selling expenses) = $55,000

So, the total overhead costs using activity-based costing is 55,000.Therefore,thecorrectansweris55,000. Therefore, the correct answer is 55,000.

This problem has been solved

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