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Question 3 of 15 View Policies Current Attempt in Progress Cost Titanium Assembly 500 mach. hours Inspections Reynoso Corporation manufactures titanium and aluminum tennis racquets. Reynoso's total overhead costs consist of assembly costs and inspection costs. The following information is available: > 350 2100 labor hours O $59750. O $33000. O $55000. O $77000. Save for Later Aluminum 500 mach. hours 150 1900 labor hours Total Cost $57000 Reynoso is considering switching from one overhead rate based on labor hours to activity-based costing. Using activity-based costing, how much inspections cost is assigned to titanium racquets? $110000 4 -/1 Attempts: 0 of 1 used ||| Submit Answer

Question 3 of 15 View Policies Current Attempt in Progress Cost Titanium Assembly 500 mach. hours Inspections Reynoso Corporation manufactures titanium and aluminum tennis racquets. Reynoso's total overhead costs consist of assembly costs and inspection costs. The following information is available: > 350 2100 labor hours O $59750. O $33000. O $55000. O $77000. Save for Later Aluminum 500 mach. hours 150 1900 labor hours Total Cost $57000 Reynoso is considering switching from one overhead rate based on labor hours to activity-based costing. Using activity-based costing, how much inspections cost is assigned to titanium racquets? $110000 4 -/1 Attempts: 0 of 1 used ||| Submit Answer

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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W 88 303 29 M Question 3 of 15 View Policies Current Attempt in Progress Cost Assembly Inspections Reynoso Corporation manufactures titanium and aluminum tennis racquets. Reynoso's total overhead costs consist of assembly costs and inspection costs. The following information is available: O $59750. O $33000. O $55000. O $77000. .. Save for Later 144 4* < 500 mach. hours % Titanium 2100 labor hours HINGA 5 > 350 Reynoso is considering switching from one overhead rate based on labor hours to activity-based costing. Using activity-based costing, how much inspections cost is assigned to titanium racquets? > 16 6 500 mach. hours al pus pe 46 squared Aquoday DI Aluminum 1900 labor hours ANS MON BO 7 150 U Total Cost * $57000 $110000 e ho 9 T ہے O WORLD CIDE FOUINCIAL CUP MOBILE AL 30801- Jalldudlashbatllat. Komp Attempts: 0 of 1 used 12 E 11 * prt sc -/1 = ← backspace Submit Answer scr lk Insert **** pause home ** ***** *** ste AV ***** ** clear *** Days
Transcribed Image Text:W 88 303 29 M Question 3 of 15 View Policies Current Attempt in Progress Cost Assembly Inspections Reynoso Corporation manufactures titanium and aluminum tennis racquets. Reynoso's total overhead costs consist of assembly costs and inspection costs. The following information is available: O $59750. O $33000. O $55000. O $77000. .. Save for Later 144 4* < 500 mach. hours % Titanium 2100 labor hours HINGA 5 > 350 Reynoso is considering switching from one overhead rate based on labor hours to activity-based costing. Using activity-based costing, how much inspections cost is assigned to titanium racquets? > 16 6 500 mach. hours al pus pe 46 squared Aquoday DI Aluminum 1900 labor hours ANS MON BO 7 150 U Total Cost * $57000 $110000 e ho 9 T ہے O WORLD CIDE FOUINCIAL CUP MOBILE AL 30801- Jalldudlashbatllat. Komp Attempts: 0 of 1 used 12 E 11 * prt sc -/1 = ← backspace Submit Answer scr lk Insert **** pause home ** ***** *** ste AV ***** ** clear *** Days
Expert Solution
Step 1

Activity Based Costing (ABC Costing) :— It is the method of costing which is used to allocate total activity overhead cost to activity cost pool. 

 

Activity overhead cost is allocated between the activity cost pool in following steps :—

  1. First we have to calculate activity rate. 
  2. Activity Rate = Total Activity cost/Total activity cost driver
  3. Then this activity rate is used to allocated the total activity overhead cost. 
  4. Activity rate is multiplied with cost driver of respective cost pool to calculate allocated activity overhead cost.
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