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Multiple Choice Assume a company's activity-based costing system contains an activity called Engineering Change Orders (ECOs). This activity cost pool includes a total of $160,000
Multiple Choice Assume a company's activity-based costing system contains an activity called Engineering Change Orders (ECOs). This activity cost pool includes a total of $160,000 in its numerator. One of the company's products was charged $400 from this activity because it required two ECOS during the year. How many ECOS were used to calculate the ECO activity rate? 700 550 425 800 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: Direct materials Product B $ 251,700 Product A $ 436,300 Direct labor $ 200,000 $ 104,000 Manufacturing overhead Cost of goods sold Total $ 688,000 304,000 608,000 $ 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) Machining (machine-hours) Setups (setup hours) Product design (number of products). Other (organization-sustaining costs) Total manufacturing overhead cost Manufacturing Overhead $ 213,500 157,500 120,000 117,000 Product A 81,500 75 1 Activity Product B 71,000 300 1 Total 152,500 375 2 NA $ 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 A? Note: Do not round your intermediate calculations. Multiple Choice $200,800 $203,800 $205,600 $210,600
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