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The ABC Company, maker of birdhouses is looking at different ways of allocating shared costs (overhead). The Cost Accountant has been provided the following data
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The ABC Company, maker of birdhouses is looking at different ways of allocating shared costs (overhead). The Cost Accountant has been provided the following data for the past month:
Birdhouse Models Quantity Produced Total Machine Hours Total Labor Hours Basic 100 10 25 Standard 100 20 40 Deluxe 25 40 60
The Spend pools are provided as:
Material: $3000
Direct Labor: $5000
Overhead: $2000
If Overhead is allocated based on the activity of Quantity Produced, how much of the $2,000 cost will be allocated to the Deluxe Birdhouse?
A. $222
B. $888
C. $960
D. $1,142
The ABC Company, maker of birdhouses is looking at different ways of allocating shared costs (overhead). The Cost Accountant has been provided the following data for the past month:
| Birdhouse Models | Quantity Produced | Total Machine Hours | Total Labor Hours |
| Basic | 100 | 10 | 25 |
| Standard | 100 | 20 | 40 |
| Deluxe | 25 | 40 | 60 |
The Spend pools are provided as:
Material: $3000
Direct Labor: $5000
Overhead: $2000
If Overhead is allocated based on the activity of Quantity Produced, how much of the $2,000 cost will be allocated to the Deluxe Birdhouse?
| A. | $222 | |
| B. | $888 | |
| C. | $960 | |
| D. | $1,142 |
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