The controller of Sensor Co., implementing the ABC system in the assembly department, identifies the following three cost pools and cost drivers: Cost pool Costs Cost driver Product A Product B Setup of machines 10,000 Number of setups 40 60 Parts assembly 20,000 Number of parts 150 250 Receiving and handling of materials 20,000 Pounds of materials 5 5 Total overhead 50,000 What is the cost of machine setups for product A? Choose a. 7,500 b. 6,000 c. 10,000
The controller of Sensor Co., implementing the ABC system in the assembly department, identifies the following three cost pools and cost drivers: Cost pool Costs Cost driver Product A Product B Setup of machines 10,000 Number of setups 40 60 Parts assembly 20,000 Number of parts 150 250 Receiving and handling of materials 20,000 Pounds of materials 5 5 Total overhead 50,000 What is the cost of machine setups for product A? Choose a. 7,500 b. 6,000 c. 10,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
The controller of Sensor Co., implementing the ABC system in the assembly department, identifies the following three cost pools and cost drivers:
|
Cost pool |
Costs |
Cost driver |
Product A |
Product B |
|---|---|---|---|---|
|
Setup of machines |
10,000 |
Number of setups |
40 |
60 |
|
Parts assembly |
20,000 |
Number of parts |
150 |
250 |
|
Receiving and handling of materials |
20,000 |
Pounds of materials |
5 |
5 |
|
Total |
50,000 |
|
|
|
What is the cost of machine setups for product A?
Choose
a. 7,500
b. 6,000
c. 10,000
d. 4,000
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