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How to do Question 3

How to do Question 3

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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How to do Question 3

A company has the following overhead costs and activities: Estimated Expected Activity Product V Product W Product X Overhead Activities and Activity Measures Machine setups (setups) Processing customer orders (orders) Assembling products (assembly-hours) $9,178.00 Cost $7,234.50 $3,565.50 69 12 10 20 9 21 492 697 111 1. If the company allocates overhead to products using assembly hours as the single allocation base, how much overhead will be allocated to product X? A. $1,706 B. $784 C. $618 D. $304 How much overhead cost would be assigned to Product V using the activity-based costing system? A. S158 B. $91,722 C. $10,385 D. $5,485 3. After changing from the traditional costing system that uses assembly hours as the single allocation base to activity-based costing, overhead costs assigned to Product W would be: A. increased by S5,803. B. increased by S4,194. C. decreased by s5,803. D. decreased by $4,194.
Transcribed Image Text:A company has the following overhead costs and activities: Estimated Expected Activity Product V Product W Product X Overhead Activities and Activity Measures Machine setups (setups) Processing customer orders (orders) Assembling products (assembly-hours) $9,178.00 Cost $7,234.50 $3,565.50 69 12 10 20 9 21 492 697 111 1. If the company allocates overhead to products using assembly hours as the single allocation base, how much overhead will be allocated to product X? A. $1,706 B. $784 C. $618 D. $304 How much overhead cost would be assigned to Product V using the activity-based costing system? A. S158 B. $91,722 C. $10,385 D. $5,485 3. After changing from the traditional costing system that uses assembly hours as the single allocation base to activity-based costing, overhead costs assigned to Product W would be: A. increased by S5,803. B. increased by S4,194. C. decreased by s5,803. D. decreased by $4,194.
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