UR Company has two products, U and R. Overhead costs are presently allocated to the two products
Question:
UR Company has two products, U and R. Overhead costs are presently allocated to the two products based on the labor-hours used to produce each product. It takes one labor-hour to make one unit of each product.
The chief financial officer has suggested converting to activity-based costing. She collected the data shown below for three cost drivers and activities to be used under activity-based costing: 6k6 What is the total overhead allocated to Product U using the current method of allocating overhead based on labor-hours (80,000 labor-hours for U and 50,000 labor-hours for R)?
a. $113,600.
b. $130,000.
c. $146,400.
d. $160,000.
e. None of the above.
Step by Step Answer:
Accounting A Business Perspective
ISBN: 9780075615859
7th Edition
Authors: Roger H. Hermanson, James Don Edwards, Michael W. Maher