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The controller of Sensor Co., after taking Managerial Accounting, has decided to implement an ABC system in the assembly department. She identifies the following three cost pools and cost drivers: Cost pool Setup of machines Parts assembly Receiving and handling of materials Total overhead Costs 10,000 20,000 20,000 50,000 10,000 21,500 4,000 7,500 Cost driver Number of setups Number of parts Pounds of materials What is the total overhead cost in the assembly department for product A? Product A 40 150 5 Product B 60 250 01 5

The controller of Sensor Co., after taking Managerial Accounting, has decided to implement an ABC system in the assembly department. She identifies the following three cost pools and cost drivers: Cost pool Setup of machines Parts assembly Receiving and handling of materials Total overhead Costs 10,000 20,000 20,000 50,000 10,000 21,500 4,000 7,500 Cost driver Number of setups Number of parts Pounds of materials What is the total overhead cost in the assembly department for product A? Product A 40 150 5 Product B 60 250 01 5

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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8. The controller of Sensor Co., after taking Managerial Accounting, has decided to implement an ABC system in the assembly department. She identifies the following three cost pools and cost drivers: Cost pool Setup of machines Parts assembly Receiving and handling of materials Total overhead Costs 7,500 10,000 20,000 20,000 50,000 Cost driver Number of setups Number of parts Pounds of materials What is the total overhead cost in the assembly department for product A? O 10,000 21,500 4,000 Product A 40 150 5 Product B 60 250 5
Transcribed Image Text:8. The controller of Sensor Co., after taking Managerial Accounting, has decided to implement an ABC system in the assembly department. She identifies the following three cost pools and cost drivers: Cost pool Setup of machines Parts assembly Receiving and handling of materials Total overhead Costs 7,500 10,000 20,000 20,000 50,000 Cost driver Number of setups Number of parts Pounds of materials What is the total overhead cost in the assembly department for product A? O 10,000 21,500 4,000 Product A 40 150 5 Product B 60 250 5
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