Windsor Co. incurs $881,250 of overhead costs each year in its three main departments, machining ($500,000), inspections ($250,000), and packing ($131,250). The machining department works 4,000 hours per year, there are 600 inspections per year, and the packing department packs 1,000 orders per year. Information about Windsor's two products is as follows: Product X Product Y Machining hours 1,000 3,000 Inspections 100 500 Orders packed 350 650 Direct labor hours 1,700 1,800 Using ABC, how much overhead is assigned to Product X this year? a. $305,048 b. $212,604 c. $428,036 d. $440,625

Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter3: Cost Behavior
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Problem 11E: Cashion Company produces chemical mixtures for veterinary pharmaceutical companies. Its factory has...
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Windsor Co. incurs $881,250 of overhead costs each year in its three main departments,
machining ($500,000), inspections ($250,000), and packing ($131,250). The machining
department works 4,000 hours per year, there are 600 inspections per year, and the packing
department packs 1,000 orders per year. Information about Windsor's two products is as
follows:
Product X Product Y
Machining hours
1,000
3,000
Inspections
100
500
Orders packed
350
650
Direct labor hours
1,700
1,800
Using ABC, how much overhead is assigned to Product X this year?
a. $305,048
b. $212,604
c. $428,036
d. $440,625
Transcribed Image Text:Windsor Co. incurs $881,250 of overhead costs each year in its three main departments, machining ($500,000), inspections ($250,000), and packing ($131,250). The machining department works 4,000 hours per year, there are 600 inspections per year, and the packing department packs 1,000 orders per year. Information about Windsor's two products is as follows: Product X Product Y Machining hours 1,000 3,000 Inspections 100 500 Orders packed 350 650 Direct labor hours 1,700 1,800 Using ABC, how much overhead is assigned to Product X this year? a. $305,048 b. $212,604 c. $428,036 d. $440,625
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