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
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
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 5CE: Roberts Company produces two weed eaters: basic and advanced. The company has four activities:...
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