Carriage Manufacturing uses an activity-based costing system. The company produces Model 21 and Model 22. Information relating to the two products is as follows:

	Model 21	Model 22
Units produced	24,000	30,000
Machine hours	7,500	8,500
Direct labor hours	8,000	12,000
Materials handling (number of moves)	4,000	6,000
Setups	5,000	7,000

The following costs are reported:

Materials handling	$ 40,000
Labor-related overhead	120,000
Setups	60,000

Setup costs assigned to Model 22 are

Question 1Answer

a.

$36,000.

b.

$25,000.

c.

$35,000.

d.

$28,000.