HiTech Products manufactures three types of remote-control devices: Economy, Standard, and Deluxe. The company, which uses activity-based costing, has identified five activities (and related cost drivers). Each activity, its budgeted cost, and related cost driver is identified below. The following information pertains to the three product lines for next year:

1. Assume that HiTech is using a volume-based costing system, and the preceding overhead costs are applied to all products on the basis of direct labor hours. The overhead cost that would be assigned to the Deluxe product line is closest to:

A.

$456,471.

B.

$646,471.

C.

$961,176.

D.	$1,141,176.

E.	None of the other answers is correct.

2. Assume that HiTech is using a volume-based costing system, and the preceding overhead costs are applied to all products on the basis of direct labor hours. The overhead cost that would be assigned to the Standard product line is closest to:

A.

$456,471.

B.

$646,471.

C.

$961,176.

D.	$1,141,176.

E.	None of the other answers is correct.

answer: A,D explain why

Activity Cost Cost Driver 225,000 Material handling Number of parts 2,475,000 Number of parts Material insertion Machine hours Automated machinery 840,000 170,000 Finishing Direct labor hours Packaging 170,000 Orders shipped Total 3,880,000