Assume a company manufactures only two products-14,000 units of Product A and 6,000 units of Product B. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to three cost pools. The following additional information is available for the company as a whole and for Products A and B: Activity Cost Pool Machining Machine setups Product design Activity Measure Machine-hours Number of setups Number of products Product A 9,000 50 1 Estimated Overhead Cost Product B 6,000 150 1 $ 300,000 $ 150,000 $ 78,000 Expected Activity 15,000 MH 200 Setups Activity Measure Machine-hours Number of setups Number of products Using the ABC system, how much total overhead cost would be assigned from all of the activities to Product A? 2 Products

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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COTB MC Qu. 7-44 (Static) Assume a company manufactures only two...
Assume a company manufactures only two products-14,000 units of Product A and 6.000 units of Product B. It is considering implementing an activity-based costing (ABC) system that allocates all of its
manufacturing overhead to three cost pools. The following additional information is available for the company as a whole and for Products A and B
Activity Cost Pool
Machining
Machine setups
Product design
Activity Measure
Machine-hours
Number of setups
Number of products
Product A
9,000
50
1
Product B
6,000
150
Estimated
Overhead
Cost
1
$ 300,000
$ 150,000
$ 78,000
Activity Measure
Machine-hours
Number of setups
Number of products
Using the ABC system, how much total overhead cost would be assigned from all of the activities to Product A?
Expected Activity
15,000 MH
200 Setups
2 Products
Transcribed Image Text:COTB MC Qu. 7-44 (Static) Assume a company manufactures only two... Assume a company manufactures only two products-14,000 units of Product A and 6.000 units of Product B. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to three cost pools. The following additional information is available for the company as a whole and for Products A and B Activity Cost Pool Machining Machine setups Product design Activity Measure Machine-hours Number of setups Number of products Product A 9,000 50 1 Product B 6,000 150 Estimated Overhead Cost 1 $ 300,000 $ 150,000 $ 78,000 Activity Measure Machine-hours Number of setups Number of products Using the ABC system, how much total overhead cost would be assigned from all of the activities to Product A? Expected Activity 15,000 MH 200 Setups 2 Products
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