Lily Corporation manufactures titanium and aluminum tennis racquets. Lily's total overhead costs consist of assembly costs and inspection costs. The following information is available regarding activity cost pools, estimated use of activities per product, and total estimated overhead costs: Activity Cost Pools Titanium Aluminum Total Cost Assembly 500 mach. hrs. 500 mach. hrs. $80000 Inspections 350 150 $118000 2100 labor hrs. 1900 labor hrs. Lily is considering switching from one overhead rate based on labor hours to activity-based costing. If activity-based costing is used, what amount of assembly cost is assigned to titanium racquets? O $19950. O $42000. O $40000. O $56000.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Lily Corporation manufactures titanium and aluminum tennis racquets. Lily's total overhead costs consist of assembly costs and
inspection costs. The following information is available regarding activity cost pools, estimated use of activities per product, and total
estimated overhead costs:
Activity Cost Pools
Titanium
Aluminum
Total Cost
Assembly
500 mach, hrs.
500 mach. hrs.
$80000
Inspections
350
150
$118000
2100 labor hrs.
1900 labor hrs.
Lily is considering switching from one overhead rate based on labor hours to activity-based costing.
If activity-based costing is used, what amount of assembly cost is assigned to titanium racquets?
O $19950.
O $42000.
O $40000.
O $56000.
Transcribed Image Text:Lily Corporation manufactures titanium and aluminum tennis racquets. Lily's total overhead costs consist of assembly costs and inspection costs. The following information is available regarding activity cost pools, estimated use of activities per product, and total estimated overhead costs: Activity Cost Pools Titanium Aluminum Total Cost Assembly 500 mach, hrs. 500 mach. hrs. $80000 Inspections 350 150 $118000 2100 labor hrs. 1900 labor hrs. Lily is considering switching from one overhead rate based on labor hours to activity-based costing. If activity-based costing is used, what amount of assembly cost is assigned to titanium racquets? O $19950. O $42000. O $40000. O $56000.
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