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Rocket Products manufactures three types of remote-control devices: Economy, Standard, and Deluxe. The company, which uses activity-based costing, has identified five activities (and related cost
Rocket Products manufactures three types of remote-control devices: Economy, Standard, and Deluxe. The company, which uses activity-based costing, has identified five activities (and related cost drivers). Each activity, its budgeted cost, and related cost driver is identified below. Activity Material handling Material insertion Cost 225,000 2,475,000 Cost Driver Number of parts Number of parts Machine hours Direct labor hours Orders shipped Automated machinery 840,000 170,000 Finishing Packaging Total 170,000 $ 3,880,000 The following information pertains to the three product lines for next year: Standard Deluxe Economy 10,000 5,000 2,000 Units to be produced Orders to be shipped Number of parts per unit 500 200 1,000 10 15 25 Labor hours per unit Machine hours per unit 2 Assume that Rocket is using a volume-based costing system, and the preceding overhead costs are applied to all products on the basis of direct labor hours. The total overhead cost that would be assigned to the Deluxe product line is closest to: Select one: A. $456,471. B. $1,108,571. C. $961,176. D. $646,471. o o E. None of the answers is correct
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