Milan Company has identified three cost pools to allocate overhead costs. The following estimates are provided for the coming year: Cost Pool Overhead Costs Cost driver Activity level Supervision of direct labor S624,000 Direct labor-hours 940,000 Machine maintenance $100,000 Machine-hours 840,000 Facility rent s216,000 Square feet of area 140,000 Total overhead costs S940,000 The accounting records show the Mossman Job consumed the following resources: Cost driver Actual level Direct labor-hours 290 Machine-hours 1,681.68 Square feet of area 50 Under activity-based costing, what is the amount of machine maintenance costs allocated to the Mossman Job? (Do not round any intermediary calculations.) Select one: a. $1,881.88 b. $200.20 c $1,681.68 d. $210.45

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Milan Company has identified three cost pools to allocate overhead costs. The following estimates are
provided for the coming year:
Cost Pool
Overhead Costs Cost driver
Activity level
Supervision of direct labor
S624,000
Direct labor-hours
940,000
Machine maintenance
$100,000
Machine-hours
840,000
Facility rent
S216,000
Square feet of area
140,000
Total overhead costs
S940,000
The accounting records show the Mossman Job consumed the following resources:
Cost driver
Actual level
Direct labor-hours
290
Machine-hours
1,681.68
Square feet of area
50
Under activity-based costing, what is the amount of machine maintenance costs allocated to the Mossman
Job? (Do not round any intermediary calculations.)
Select one:
a. $1881.88
b. $200.20
c $1,681.68
d. $210.45
Transcribed Image Text:Milan Company has identified three cost pools to allocate overhead costs. The following estimates are provided for the coming year: Cost Pool Overhead Costs Cost driver Activity level Supervision of direct labor S624,000 Direct labor-hours 940,000 Machine maintenance $100,000 Machine-hours 840,000 Facility rent S216,000 Square feet of area 140,000 Total overhead costs S940,000 The accounting records show the Mossman Job consumed the following resources: Cost driver Actual level Direct labor-hours 290 Machine-hours 1,681.68 Square feet of area 50 Under activity-based costing, what is the amount of machine maintenance costs allocated to the Mossman Job? (Do not round any intermediary calculations.) Select one: a. $1881.88 b. $200.20 c $1,681.68 d. $210.45
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