In its first year of operations a company produced and sold 70,000 units of Product A...

 

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In its first year of operations a company produced and sold 70,000 units of Product A at a selling price of $20 per unit and 17,500 units of Product B at a selling price of $40 per unit. Additional information relating to the company's only two products is shown below: Direct materials Direct labor Manufacturing overhead Cost of goods sold Product A $ 436,300 $ 200,000 Product B $ 251,7001 $ 104,000 Activity Cost Pool (and Activity Measure) Machining (machine-hours) Setups (setup hours) Product design (number of products) Other (organization-sustaining costs) Total manufacturing overhead cost Total $ 688,000 304,000 608,000 $ 1,600,000 The company created an activity-based costing system that allocated its manufacturing overhead costs to four activities as follows: Manufacturing Overhead $ 213,500 157,500 120,000 117,000 $ 608,000 Product A 80,300 75 1 Activity Product B 72,200 300 1 Total 152,500 375 2 The company's ABC implementation team also concluded that $50,000 and $100,000 of the company's advertising expenses could be directly traced to Product A and Product B, respectively. The remainder of its selling and administrative expenses ($400,000) was organization-sustaining in nature, The company's activity-based costing system would allocate how much manufacturing overhead to Product A? (Do not round your intermediate calculations.) In its first year of operations a company produced and sold 70,000 units of Product A at a selling price of $20 per unit and 17,500 units of Product B at a selling price of $40 per unit. Additional information relating to the company's only two products is shown below: Direct materials Direct labor Manufacturing overhead Cost of goods sold Product A $ 436,300 $ 200,000 Product B $ 251,7001 $ 104,000 Activity Cost Pool (and Activity Measure) Machining (machine-hours) Setups (setup hours) Product design (number of products) Other (organization-sustaining costs) Total manufacturing overhead cost Total $ 688,000 304,000 608,000 $ 1,600,000 The company created an activity-based costing system that allocated its manufacturing overhead costs to four activities as follows: Manufacturing Overhead $ 213,500 157,500 120,000 117,000 $ 608,000 Product A 80,300 75 1 Activity Product B 72,200 300 1 Total 152,500 375 2 The company's ABC implementation team also concluded that $50,000 and $100,000 of the company's advertising expenses could be directly traced to Product A and Product B, respectively. The remainder of its selling and administrative expenses ($400,000) was organization-sustaining in nature, The company's activity-based costing system would allocate how much manufacturing overhead to Product A? (Do not round your intermediate calculations.)

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Allocate manufacturing overhead to Product A using the activitybased costing ABC system Calculate the overhead rate for each activity cost pool For Ma... View the full answer