option a $84 option b $1,120,000 option c $400,000 option d $720,000

Doreen Design Company makes two products (standard and deluxe) and has baditionally allocated manufacturing overhead on the basis of machine hours. Data for the two products for the upcoming year is as follows: Standard Deluxe (120,000 units) (30,000 units) Direct materials per unit Direct labour cost per unit Total machine hours required per unit (30 minutes (0.5 hr) 12 minutes ( 2 his.) Management is considering an ABC system. In addition to machine hours the company has identified machine set up as an additional driver. Information on the two drivers are presented below. Activity Pool Cost Standard Deluxe Total (for 120,000 units) (for 30,000 units) Machine set ups $640,090 2000 selups 6,900 set ups Machine hours $480,006 60,008 m.hours 60,000 m. hours 120,900 The tota manufacturing overhead costs allocated to the standard product live under activity-based costing are