Kiner Co. computed an overhead rate for machining costs ($700000) of $5 per machine hour. Machining costs are driven by machine hours. If computed based on direct labor hours, the overhead rate for machining costs would be $10 per direct labor hour. The company produces two products, Cape and Chap. Cape requires 81600 machine hours and 20000 direct labor hours, while Chap requires 54400 machine hours and 30000 direct labor hours. Using activity-based costing, machining costs assigned to each product is

Cape

Chap

$750000

$250000

$382366

$317634

$408000

$272000

$200000

$300000