Aunt Lucy's Candies sells standard and premium chocolate candies through its catalog business. Many of the candies are sold in bulk to other companies. Last year, the company incurred $300,000 in overhead costs. After implementing activity-based costing (ABC), the company's controller identified the following information:
Activity
Allocation Base
Proportion of Overhead Cost
Purchasing
Number of purchase orders
30%
Processing
Number of units
50%
Sales
Number of sales orders
20%
The number of activities for standard and premium candies is as follows:
Number of purchase orders
Standard 4,000
Premium 2,000
Number of units
Standard 200,000
Premium 100,000
Number of sales orders
Standard3,000
Premium 1,000
Refer to aunt lucys information above. if a singles sales order for premium candies requires 2 purchase orders for a total of 500 pieces how much overhead should be assigned to this order.