Porter Industries manufactures two products, Model X and Model Y. Porter's overhead costs consist of: • • • Setting up machines = $900,000 Machining = $2,000,000 Inspecting = $700,000 Total overhead cost = $900,000+ $2,000,000 + $700,000 = $3,600,000 Information on the two products is: Model X Model Y Direct labor hours 18,000 30,000 Machine setups 700 500 Machine hours 28,000 30,000 Inspections 900 800 Overhead applied to Model Y using traditional costing based on direct labor hours is: A. $1,350,000 ABCD B. $2,250,000 C. $1,725,000 D. $2,700,000

Porter Industries manufactures two products, Model X and Model Y. Porter's overhead costs consist of: • • • Setting up machines = $900,000 Machining = $2,000,000 Inspecting = $700,000 Total overhead cost = $900,000+ $2,000,000 + $700,000 = $3,600,000 Information on the two products is: Model X Model Y Direct labor hours 18,000 30,000 Machine setups 700 500 Machine hours 28,000 30,000 Inspections 900 800 Overhead applied to Model Y using traditional costing based on direct labor hours is: A. $1,350,000 ABCD B. $2,250,000 C. $1,725,000 D. $2,700,000

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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