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 company$$s only two products is shown below:

Product A Product B Total

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

Direct labor $ $200,000$ $ $104,000304,000$

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$)$ $ $213,50090,00062,500152,500$

Setups $($setup hours$)157,50075300375$

Product design $($number of products$)120,000112$

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

Total manufacturing overhead cost $ $608,000$

The company$$s ABC implementation team also concluded that $$50,000$ and $$100,000$ of the company$$s 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 company$$s activity$-$based costing system would allocate how much manufacturing overhead to Product B$?$

Multiple Choice

$$262,500$

$$265,500$

$$268,500$

$$273,500$