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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
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 Direct labor Manufacturing overhead Cost of goods sold Product A $436,300 $200,000 Product B $251,700 $184,000 Total $ 688,000 384,000 608, eee $1,680,000 The company created an activity-based costing system that allocated its manufacturing overhead costs to four activities as follows: Activity 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 $608,000 Product A 81,600 75 1 NA Product B Total 70,900 152,500 3ee 375 1 2 NA NA 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 seling 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? The company's activity-based costing system would allocate how much manufacturing overhead to Product A? Multiple Choice $203,940 $210,740 $200.940 $205,740
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