Summer Day Inc. manufactures two models of its hammock, the Superior and the Deluxe. The Superior model requires $\mathrm{}\mathrm{}15,000$ direct labour hours and the Deluxe requires $\mathrm{}45,000$ direct labour hours. The company produces $\mathrm{}5,000$ units of the Superior model and $\mathrm{}2,000$ units of the Deluxe model each year. The company produces the Superior model in batch sizes of $200,$ while it produces the Deluxe model in batch sizes of $100.$ The company expects to incur $$120,000$ of total setup costs this year. How much of the setup costs are allocated to the Superior model using ABC costing?

Answer rating: 100% (QA)

To allocate the setup costs to the Superior model using ActivityBased Costing ABC we need to determi... View the full answer