In its first year of operations a company produced and sold 70,000 units of Product A at a selling price of $20 per unit and 17,500 units of Product B at a selling price of $40 per unit. Additional information relating to the companys only two products is shown below:

Product A Product B Total

Direct materials $ 436,300 $ 251,700 $ 688,000

Direct labor $ 200,000 $ 104,000 304,000

Manufacturing overhead 608,000

Cost of goods sold $ 1,600,000

The company created an activity-based costing system that allocated its manufacturing overhead costs to four activities as follows:

Activity Cost Pool (and Activity Measure) Manufacturing Overhead Activity

Product A Product B Total

Machining (machine-hours) $ 213,500 80,000 72,500 152,500

Setups (setup hours) 157,500 75 300 375

Product design (number of products) 120,000 1 1 2

Other (organization-sustaining costs) 117,000 NA NA NA

Total manufacturing overhead cost $ 608,000

The companys ABC implementation team also concluded that $50,000 and $100,000 of the companys advertising expenses could be directly traced to Product A and Product B, respectively. The remainder of its selling and administrative expenses ($400,000) was organization-sustaining in nature.

The companys activity-based costing system would allocate how much manufacturing overhead to Product A? (Do not round your intermediate calculations.)

Garrison 17e Rechecks 2021-11-13