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A company makes two products Product A and B. Data regarding the two products follow. Product A Products Direct Labor-Hours per Unit 0.75 0.50 Annual
A company makes two products Product A and B. Data regarding the two products follow. Product A Products Direct Labor-Hours per Unit 0.75 0.50 Annual Production 20,000 units 50,000 units Additional information is as follows: a. Product A requires $40 in direct materials per unit, and Product Brequires $32. b. The direct labor wage rate is $18 per hour c. The company's activity based absorption costing system has the following activity cost pools Activity Cost Pool (and Activity Measures Machine setups (number of setupa) Special processing (machine-hours) General factory (Direct labor-hours) Estimated Overhead Cost $100,000 $200,000 $150,000 Expected Activity Product A Product 3 Total 100 300 400 2.000 6,000 8,000 15,000 25,000 40.000 How much overhead cost would be assigned from the Special processing activity to Product A? How much overhead cost would be assigned from the Special processing activity to Product A? Multiple Choice $50,000 $67,667 $75,000 $40,000
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