Question
A firm produces two products, X and Y and uses activity based costing to allocate overhead costs. The various activities undertaken by the firm and
A firm produces two products, X and Y and uses activity based costing to allocate overhead costs. The various activities undertaken by the firm and the overhead cost pools and cost drivers are summarised below.Overhead activityOverhead costCost driverCost driver consumptionXYMachining$125,000Machine hours2575Setups$ 80,000Number of setups2436Engineering$120,000Engineering hours12080
If the firm uses the above cost drivers to allocate the overhead of each activity, then what amount of overhead will be allocated to products X, and Y respectively?
Select one:
a.$7805.55; $5388.88
b.$135,250; $189,750
c.$152,569.44; $207,430.55
d.$157,144; $167,856
e.$207,430.55; $152,569.44
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