Assume a company manufactures only two products—14,000 units of Product C and 6,000 units of Product D. 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 C and D: Activity Cost Pool Activity Measure Estimated Overhead Cost Expected Activity Machining Machine-hours $ 300,000 15,000 MH Machine setups Number of setups $ 150,000 200 Setups Product design Number of products $ 78,000 2 Products Activity Measure Product C Product D Machine-hours 9,000 6,000 Number of setups 50 150 Number of products 1 1 Using the ABC system, how much total overhead cost would be assigned from all of the activities to Product D? Multiple Choice $271,500 $261,500 $301,500 $251,500
Assume a company manufactures only two products—14,000 units of Product C and 6,000 units of Product D. 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 C and D: Activity Cost Pool Activity Measure Estimated Overhead Cost Expected Activity Machining Machine-hours $ 300,000 15,000 MH Machine setups Number of setups $ 150,000 200 Setups Product design Number of products $ 78,000 2 Products Activity Measure Product C Product D Machine-hours 9,000 6,000 Number of setups 50 150 Number of products 1 1 Using the ABC system, how much total overhead cost would be assigned from all of the activities to Product D? Multiple Choice $271,500 $261,500 $301,500 $251,500
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Assume a company manufactures only two products—14,000 units of Product C and 6,000 units of Product D. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing
| Activity Cost Pool | Activity Measure | Estimated Overhead Cost | Expected Activity | |
|---|---|---|---|---|
| Machining | Machine-hours | $ 300,000 | 15,000 | MH |
| Machine setups | Number of setups | $ 150,000 | 200 | Setups |
| Product design | Number of products | $ 78,000 | 2 | Products |
| Activity Measure | Product C | Product D |
|---|---|---|
| Machine-hours | 9,000 | 6,000 |
| Number of setups | 50 | 150 |
| Number of products | 1 | 1 |
Using the ABC system, how much total overhead cost would be assigned from all of the activities to Product D?
Multiple Choice
-
$271,500
-
$261,500
-
$301,500
-
$251,500
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