Freddie Mercury started a company that makes electric guitar…
Freddie Mercury started a company that makes electric guitars. He has recently implemented an activity-based costing system to better apply his overhead expenses. Overhead is applied based on design hours, machine hours, and inspection hours. The table below outlines the activity cost pools and related data for the year. Activity Cost Pools Cost Driver Estimated Overhead Estimated Cost Driver Design Design Hours $75,000 300 Production Machine Hours $100,000 2000 Inspection Inspection Hours $45,000 150 During the year, the factory finished a new batch of ultra high-tech guitars. To produce the guitars, the company recorded 60 design hours, 800 machine hours, 20 machine set-ups, 12 purchase orders, and 40 inspection hours. How much manufacturing overhead should be applied to this batch of guitars? Round your answer to the nearest whole dollar.