Assume a company produces and sells only two products14,000 units of Product A and 6,000 units of Product B. The selling prices are $65 per unit for Product A and $96 per unit for Product B. Product As direct materials and direct labor costs per unit are $30 and $18, respectively. Product Bs direct materials and direct labor costs per unit are $34 and $16, respectively. The company uses a plantwide overhead rate based on direct labor dollars. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to three cost pools. The following additional information is available for the company as a whole and for Products A and B:

Activity Cost Pool	Activity Measure	Estimated Overhead Cost	Expected Activity
Machining	Machine-hours	$ 300,000	15,000	MH
Machine setups	Number of setups	$ 150,000	200	Setups
Product design	Number of products	$ 80,000	2	Products

Activity Measure	Product A	Product B
Machine-hours	9,000	6,000
Number of setups	50	150
Number of products	1	1

Using the companys plantwide approach, the total overhead cost allocated to Product A is closest to (Round your intermediate calculations to 2 decimal places.):

Multiple Choice

• $403,040.

• $383,040.

• $353,040.

• $423,040.

Assume a service company has implemented an activity-based costing system with five activities as shown below:

Activity Cost Pool (Activity Measure)	Total Cost	Total Activity
Customer deliveries (Number of deliveries)	$ 400,000	8,000	deliveries
Manual order processing (Number of manual orders)	$ 280,000	2,000	manual orders
Electronic order processing (Number of electronic orders)	$ 150,000	15,000	electronic orders
Line item picking (Number of line items picked)	$ 450,000	375,000	line items
Other organization-sustaining costs (None)	$ 300,000

The company serves numerous customers, two of which include Hospital A and Hospital B. The activity demands pertaining to these two customers are as follows:

Activity Measure	Activity
	Hospital A	Hospital B
Number of deliveries	10	25
Number of manual orders	0	31
Number of electronic orders	15	0
Number of line items picked	120	250

How much cost would be assigned from the Manual Order Processing activity to Hospital B?

Multiple Choice

• $284,340

• $4,340

• $2,800

• $280,000

Assume a company produces and sells only two products14,000 units of Product A and 6,000 units of Product B. The selling prices are $65 per unit for Product A and $96 per unit for Product B. Product As direct materials and direct labor costs per unit are $30 and $12, respectively. Product Bs direct materials and direct labor costs per unit are $34 and $15, respectively. The company is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to three cost pools. The following additional information is available for the company as a whole and for Products A and B:

Activity Cost Pool	Activity Measure	Estimated Overhead Cost	Expected Activity
Machining	Machine-hours	$ 300,000	12,500	MH
Machine setups	Number of setups	$ 150,000	200	Setups
Product design	Number of products	$ 78,000	2	Products

Activity Measure	Product A	Product B
Machine-hours	9,000	6,000
Number of setups	50	150
Number of products	1	1

Using the ABC system, what is the product margin for Product A?

Multiple Choice

• $29,500

• $54,500

• $46,000

• $74,000