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Tandem Company manufactures two products (D and F). The overhead costs ($84,000) have been divided into three cost pools that use the following activity drivers: Product D F Number of Setups Machine Hours Packing Orders 10 10 500 2,000 75 175 $18,750 Cost per pool $11,000 $60,000 What is the allocation rate per setup using activity-based costing? a. $550 b. $1,100 c. $11,000 d. $2,200

Tandem Company manufactures two products (D and F). The overhead costs ($84,000) have been divided into three cost pools that use the following activity drivers: Product D F Number of Setups Machine Hours Packing Orders 10 10 500 2,000 75 175 $18,750 Cost per pool $11,000 $60,000 What is the allocation rate per setup using activity-based costing? a. $550 b. $1,100 c. $11,000 d. $2,200

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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Tandem Company manufactures two products (D and F). The overhead costs ($84,000) have been divided into three cost pools that use the following activity drivers: Product D F Number of Setups Machine Hours Packing Orders 10 10 500 2,000 75 175 $18,750 Cost per pool $11,000 $60,000 What is the allocation rate per setup using activity-based costing? a. $550 b. $1,100 c. $11,000 d. $2,200
Transcribed Image Text:Tandem Company manufactures two products (D and F). The overhead costs ($84,000) have been divided into three cost pools that use the following activity drivers: Product D F Number of Setups Machine Hours Packing Orders 10 10 500 2,000 75 175 $18,750 Cost per pool $11,000 $60,000 What is the allocation rate per setup using activity-based costing? a. $550 b. $1,100 c. $11,000 d. $2,200
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