Assume that a pet food manufacturer is considering adding two types of pet food to its existing product line. Research had determined that good demand exists for dog food in 40-pound bags and cat food in 0.5 pound cans.

The company identified the following partial list of activities, costs, and activity drivers expected for the next year:

Activity Expected Cost Cost Driver

handling materials $105,000 # of batches made

storage costs $820,000 weight of finish prod

Dog Food Cat Food

Production volume 100,000 units 200,000 units

Batches made 200 batches 150 batches

How much overhead cost will be assigned to each product line using activity based costing:

a: Dog Food: $60,000 , Cat Food $45,000

b: Dog Food $462,000; Cat Food $462,500

c: Dog Food $860,00; Cat Food $65,000

d: Dog Food $800,000 Cat Food $320