Question: Le Chocolatier Inc. produces premium chocolates and is implementing activity-based costing (ABC) to allocate overhead costs. The company has identified the following cost pools and

Le Chocolatier Inc. produces premium chocolates and is implementing activity-based costing (ABC) to allocate overhead costs. The company has identified the following cost pools and cost drivers:

Cost Pools:

  1. Materials handling
  2. Machine setup
  3. Quality control

Cost Drivers:

  1. Number of material requisitions
  2. Number of machine setups
  3. Number of quality inspections

Allocate the overhead costs of €100,000 to two products, Dark Chocolate and Milk Chocolate, based on the following activity data:

  • Dark Chocolate: 200 material requisitions, 40 machine setups, 100 quality inspections
  • Milk Chocolate: 150 material requisitions, 30 machine setups, 80 quality inspections

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