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Monrovia Bike Corp manufactures two models of bicycles: the Gully Runner and the Claim Jumper. In the past, Monrovia had been using a traditional overhead
- Monrovia Bike Corp manufactures two models of bicycles: the Gully Runner and the Claim Jumper. In the past, Monrovia had been using a traditional overhead allocation system based on machine hours. Monrovia has decided to switch to an activity-based costing system using two activity cost pools. Information related to the new system is as follows:
Activity Estimated OH Cost Estimated Activity
Automated Assembly $189,000 7,000 Mach Hrs
Parts Management $63,000 100 part #s
Actual activity for the year for the two models of bikes were as follows:
Bicycles Produced MH Used Part Numbers
Claim Jumper 300 2,400 70
Gully Runner 960 4,800 30
Under the new activity-based costing system, what amount of overhead cost would Monrovia assign to each Claim Jumper bicycle?
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