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96) Assume that company makes only two products: Product A and Product B. The companys activity-based costing system has allocated $83,250 to an activity called
96) Assume that company makes only two products: Product A and Product B. The companys activity-based costing system has allocated $83,250 to an activity called machine setups. It is considering allocating the machine setups cost its products using either the number of setups or setup hours as the activity measure. It gathered the following data with respect to these two potential activity measures:
Product A | Product B | |
Number of machine setups | 30 | 45 |
Number of setup hours per setup | 6 | 6 |
If the company uses number of setup hours as the activity measure, how much machine setup activity cost would be allocated to Product A?
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