Poodle Company manufactures two products, Mini A and Maxi B. Poodle's overhead costs consist of setting up machines- $800,000; machining- $2,000,000; and inspecting- $600,000. Information on the two products is: Direct labour hours Machine setups Machine hours Inspections Mini A 15,000 600 24,000 800 Maxi B 25,000 400 26,000 700

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 27E: Plata Company has identified the following overhead activities, costs, and activity drivers for the...
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Poodle Company manufactures two products, Mini A and Maxi B. Poodle's overhead costs
consist of setting up machines- $800,000; machining- $2,000,000; and inspecting- $600,000.
Information on the two products is:
Direct labour hours
Machine setups
Machine hours
Inspections
a. $1,640,000.
b. $1,280,000.
c. $2,125,000.*
d. $1,664,000.
Mini A
15,000
600
Your answer is incorrect.
24,000
800
Overhead applied to Maxi B using activity-based costing is
Maxi B
25,000
400
26,000
700
Transcribed Image Text:Poodle Company manufactures two products, Mini A and Maxi B. Poodle's overhead costs consist of setting up machines- $800,000; machining- $2,000,000; and inspecting- $600,000. Information on the two products is: Direct labour hours Machine setups Machine hours Inspections a. $1,640,000. b. $1,280,000. c. $2,125,000.* d. $1,664,000. Mini A 15,000 600 Your answer is incorrect. 24,000 800 Overhead applied to Maxi B using activity-based costing is Maxi B 25,000 400 26,000 700
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