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Horgen Corporation manufactures two products: Product M68B and Product H27T. The company is considering implementing an activity-based costing (ABC) system that allocates its manufacturing overhead
Horgen Corporation manufactures two products: Product M68B and Product H27T. The company is considering implementing an activity-based costing (ABC) system that allocates its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products M68B and H27T.
| Activity Cost Pool | Activity Measure | Total Cost | Total Activity | |
|---|---|---|---|---|
| Machining | Machine-hours | $ 299,000 | 13,000 | MHs |
| Machine setups | Number of setups | $ 240,000 | 400 | setups |
| Product design | Number of products | $ 80,000 | 2 | products |
| Order size | Direct labor-hours | $ 290,000 | 10,000 | DLHs |
| Activity Measure | Product M68B | Product H27T |
|---|---|---|
| Machine-hours | 6,000 | 7,000 |
| Number of setups | 250 | 150 |
| Number of products | 1 | 1 |
| Direct labor-hours | 4,000 | 6,000 |
Using the activity-based costing system, how much total manufacturing overhead cost would be assigned to Product M68B?
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