Multiple Factor Allocations-Complexity: Refer to the facts presented in Illustration 4-4. Assume the costs to be allocated and the allocation bases are as follows:

Required: What would be the new allocation of costs to Plants A and B? Why would it differ from the allocation in the bottom panel of Illustration 4-4?

Transcribed Image Text:

Cost to Be Category Allocated 1 $230,000 Allocation Base Plant A Plant B Total Number of 1 10 11 different products 2 484,000 Number of 1 120 121 3 286,000 setups Machine-hours worked 50,000 50,000 100,000