Question
Milan Company has identified three cost pools to allocate overhead costs. The following estimates are provided for the coming year: Cost Pool Overhead Costs Cost
Milan Company has identified three cost pools to allocate overhead costs. The following estimates are provided for the coming year:
| Cost Pool | Overhead Costs | Cost driver | Activity level |
| Supervision of direct labor | $624,000 | Direct labor-hours | 940,000 |
| Machine maintenance | $100,000 | Machine-hours | 840,000 |
| Facility rent | $216,000 | Square feet of area | 140,000 |
| Total overhead costs | $940,000 |
The accounting records show the Mossman Job consumed the following resources:
| Cost driver | Actual level |
| Direct labor-hours | 290 |
| Machine-hours | 1,681.68 |
| Square feet of area | 50 |
Under activity-based costing, what is the amount of machine maintenance costs allocated to the Mossman Job? (Do not round any intermediary calculations.)
A. $200.20
B. $1,881.88
C. $1,681.68
D. $210.45
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Cost Accounting A Managerial Emphasis Revised
Authors: Charles T. Horngren, Monte Wynder, William Maguire, Rebecca Tan, Srikant Datar, Lester E. Heitger
1st Australian Edition
1442554770, 978-1442554771
