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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 Overhead activity Cost driver Cost driver cost consumption Y Machining $125,000 Machine hours 25 75 Setups $ 80,000 Number of 24 36 setups Engineering $120,000 Engineering 120 80 hours 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: O a. $7805.55; $5388.88 b. $135,250; $189,750 O c. $152,569.44; $207,430.55 d. $157,144; $167,856 e. $207,430.55; $152,569.44
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