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Tony Corporation currently uses traditional costing system, applying $300,000 of overhead to products X and Y on the basis of direct labor hours. The
Tony Corporation currently uses traditional costing system, applying $300,000 of overhead to products X and Y on the basis of direct labor hours. The firm is considering a shift to activity-based costing and the creation of individual activity pools that will use direct labor hours (DLH), production setups (SU), and number of parts components (PC) as cost drivers. Data on the activity pools and respective driver volumes can be given as. Activity 1 Activity 2 Activity 3 Product (Driver: DLH) (Driver: SU) (Driver PC) X 400 75 700 Y 600 25 1,300 $60,000 $140,000 $100,000 Activity Cost The overhead cost allocated to product X by using activity-based costing procedures would be: Select one: a.$124,000 b.$180,000 C.$164,000 d.$176,000 e.$136,000
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