Acme Company produces widgets and applies manufacturing over…
Acme Company produces widgets and applies manufacturing overhead to jobs using a single plantwide rate of $30 per direct labor hour. Acme is switching to an activity-based costing system which divides the company’s total estimated overhead of $900,000 into two cost pools, Fabrication and Final Assembly. The cost driver for Fabrication will be machine hours and the cost driver for Final Assembly will be direct labor hours. Fabrication is machine-intensive and comprises 80% of Acme’s total machine hours, whereas Final Assembly is labor-intensive and comprises 80% of Acme’s total direct labor hours. On a per unit basis, each widget requires 4 direct labor hours and is assigned a total of $84 of overhead from the Final Assembly cost pool. What is the total amount of overhead costs included in the Final Assembly cost pool?