Question
help with the exercise below BRIEF EXERCISE 17.10 Allocations in an ABC System Lewis & Company applies manufacturing overhead to production using an activity-based costing
help with the exercise below
BRIEF EXERCISE 17.10
Allocations in an ABC System
Lewis & Company applies manufacturing overhead to production using an activity-based costing system. The company's utilities cost pool has accumulated $450,000, its maintenance cost pool has accumulated $600,000, and its set-up cost pool has accumulated $150,000. The company has two product lines, Deluxe and Basic. The utilities cost pool is allocated to these product lines on the basis of machine-hours. The maintenance pool is allocated on the basis of work orders. The set-up pool is allocated on the basis of production runs.
Allocate the utilities cost pool to each product line assuming the Deluxe model used 16,000 machine-hours and the Basic model used 4,000 machine-hours.
Allocate the maintenance pool to each product line assuming the Deluxe model required 125 work orders and the Basic model required 375 work orders.
Allocate the set-up pool to each product line assuming the Deluxe model required 75 production runs and the Basic model required 175 production runs.
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