Question
Allure company manufactures and distributes two products M and XY. Overhead cost are currently allocated using the number of units produced as the allocation base.
Allure company manufactures and distributes two products M and XY. Overhead cost are currently allocated using the number of units produced as the allocation base. The controller has recommended changing to an activity-based (ABC) system. She has collected the following information.
Activity Cost Driver Amount M XY
Production Setup No. of setups $90,000 6 14
Material & handling No. of parts $48,000 56 24
Packaging cost No. of units 333,750 111,000 74,000
What is the total overhead allocated to product M?
Multiple coice,
$333.750
$260,850
$210.900
$283.050
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