Question
Crane Company manufactures two products, Regular and Supreme. Cranes estimated overhead costs consist of machining, $1000000; and assembling, $500000. Information on the estimated use of
Crane Company manufactures two products, Regular and Supreme. Cranes estimated overhead costs consist of machining, $1000000; and assembling, $500000. Information on the estimated use of the cost driver by the two products is as follows: Regular Supreme Direct labor hours 10000 15000 Machine hours 10000 30000 Number of parts 90000 160000 Overhead applied to Regular using activity-based costing is $900000. $1070000. $600000. $430000.]
A company incurs $4265000 of overhead each year across three departments: Ordering and Receiving, Mixing, and Testing. The company prepares 2000 purchase orders, works 50000 mixing hours, and performs 1500 tests per year in producing 200000 drums of product Goo and 600000 drums of product Slime. The following data are available:
Activity Cost Pools | Estimated use of Driver | Cost | |
---|---|---|---|
Ordering and Receiving | 2000 | $1040000 | |
Mixing | 50000 | 1400000 | |
Testing | 1500 | 1345500 |
Production information product Goo is as follows:
Activity Cost Pools | Estimated use of Driver | ||
---|---|---|---|
Ordering and Receiving | 400 | ||
Mixing | 20000 | ||
Testing | 500 |
If ABC is used, what amount of overhead will be assigned to Goo?
$1666140
$2132500
$1066250
$1216500
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