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Kadane Corporation makes and sells two products: Product X13 and Product Z24. Until 2019, the company used a single overhead rate based on direct labor
Kadane Corporation makes and sells two products: Product X13 and Product Z24. Until 2019, the company used a single overhead rate based on direct labor hours (DLHS). For 2019, the company is considering implementing an activity-base costing (ABC) system to allocate the company's manufacturing overhead to four activity cost pools, and then to the two products. The following selected additional information is available (some numbers have been omitted): Activity Cost Pool Activity Measure Machining Machine-hours Machine setups Number of setups Product design Number of products Order size Direct labor-hours Total Cost $275,000 $210,000 $48,000 $300,000 Total Activity ? MHs setups 2 products ? DLHs Product X13 $17.50 $10.00 Product Z24 $23.00 $20.00 Per unit direct materials cost Per unit direct labor cost In total for product line: Units Machine hours Number of setups Direct labor hours 12,000 5,000 220 6,000 4,000 6,000 130 4,000 Using the ABC system, what will be the total cost of product line X13? (The company wants to find the total cost of the product line, not the per-unit cost). A. S 461,000 B. S 767,000 C. S 791,000 D. $ 624,750 E. None of the above
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