Question
A company produces numerous blends of coffee, two of which are known as the french blend and italian blend. The company's abc system divides its
A company produces numerous blends of coffee, two of which are known as the french blend and italian blend. The company's abc system divides its total manufacturing overhead of 1,982,500 into four activity cost pools as shown below.
Purchasing : Expected activity 1,500 : Estimated costs 330,000
Materials Handling: Expected 1,800 : Estimated 540,000
Quality Control: Expected 600 : Estimated 210,000
Roasting : Expected 95,000 : Estimated 902,500
French Blend
Expected Sales: 100,000 pounds
Batch Size: 10,000 pounds
Setups: 3 per batch
Purchase order size : 20,000 pounds
Roasting time per 100 pounds : 0.5 hours
Italian Blend:
Expected sales : 5,000 pounds
Batch Size : 1,250 pounds
Setups : 3 per batch
Purchasing order size : 500 pounds
Roasting time per 100 pounds: .5 hours
Assume the company uses activity based absorption costing. How much total overhead cost would be assigned tp the french blend based on its expected sales?
Multiple choice:
A: 16,850
B: 17,150
C: 17,550
D: 18,350
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