Samson Company recently installed an activity-based relational database. Using the information contained in the activity relational table, the following pool rates were computed: $400 per purchase order
$24 per machine hour, Process 1
$30 per machine hour, Process 2
$80 per engineering hour
Two products are produced by Special Products: L and M. The plant has two manufacturing processes, Process 1 and Process 2. Other processes include engineering, product handling, and procurement. Product L goes through Process 1 while Product M goes through Process 2. The product relational table for Special Products is as follows:

How much machine overhead cost will be assigned to Product M using Process 2?

 A)$2,400,000
B)$1,920,000
C)$240,000
D)$300,000
 

Transcribed Image Text:

Product L Activity Driver # Name Activity Usage Units Purchase Orders Machine Hours 200,000 2 250 3 80,000 4 Engineering Hours 1,250 Product M Activity Driver # Activity Usage 25,000 125 Name Units Purchase Orders Machine Hours Engineering Hours 1 10,000 1,500 3 4 ActivityDriver # Name Activity Usage Units Purchase Orders Machine Hours Engineering Hours 1 200,000 250 3 80,000 1,250 Product L Activity Driver # Name Activity Usage Units Purchase Orders Machine Hours 200,000 2 250 3 80,000 4 Engineering Hours 1,250 Product M Activity Driver # Activity Usage 25,000 125 Name Units Purchase Orders Machine Hours Engineering Hours 1 10,000 1,500 3 4 ActivityDriver # Name Activity Usage Units Purchase Orders Machine Hours Engineering Hours 1 200,000 250 3 80,000 1,250

Answer rating: 100% (QA)

Answer Option A 2400000 Explanation Pool ... View the full answer