1. Cake Company produces two products: A and B. The company uses activity based costing to allocate overhead. The company has identified the following three activities, related costs, and other information:

   Activity Center (Pool) Cost Driver Cost

   Machine setup Number of setups $80,000

   Machine operation Number of machine hours $200,000

   Quality control Number of inspections $70,000

   Total $350,000

   Expected activity for each product follows:

   Product Number of setups           Number of machine hours     Number of inspections

   A.                  48                                              1,800                                52

   B.                  36                                              2,200                               28

   The amount of Quality Control Activity Center costs to be allocated to Product A is:

   	A.	$24,500
   	B.	$45,500
   	C.	$70,000
   	D.	$35,000
   	E.	None of the above

Answer rating: 100% (QA)

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