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In its first year of operations a company produced and sold 70,000 units of Product A and 17,500 units of Product B. Additional information
In its first year of operations a company produced and sold 70,000 units of Product A and 17,500 units of Product B. Additional information relating to the company's only two products is shown below: Direct materials Direct labor Product A $ 436,300 Product B $ 251,700 $ 200,000 $ 104,000 Total $ 688,000 304,000 The company's direct labor wage rate is $20 per hour. It created an activity-based costing system that allocated all of its manufacturing overhead costs to three activities as follows: Activity Cost Pool (and Activity Measure) Machining (machine-hours) Setups (setup hours) Product design (number of products) Total manufacturing overhead cost Manufacturing Overhead $ 213,500 157,500 237,000 Activity Product A 81,800 Product B 70,700 Total 152,500 75 300 375 1 1 2 $ 608,000 The company's activity-based costing system would allocate how much manufacturing overhead to Product A? Multiple Choice $266,520 $260,520 $264,520 $262,520
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