Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Westmorland makes ink that it uses in ball point pens. The Company produces two colors of ink. One is blue the other is red. Ink

Westmorland makes ink that it uses in ball point pens. The Company produces two colors of ink. One is blue the other is red. Ink is made in batches with setup costs being $4,200 per batch. Demand for blue ink is significantly stronger than for red ink. During the most recent week, the company made 2 batches of ink, one blue the other red. It requires 1 hour of labor to make a gallon of ink regardless of color. There were 800 hours of labor used to make the blue ink and the 600 hours of labor used to make the red ink. If the Company uses activity-based costing and allocates the setup cost on the basis of the number of batches, the setup cost allocated to the Please show your work.

Multiple Choice

blue ink is $3,600 and red ink is $4,800.

blue ink is $4,200 and red ink is $4,200.

blue ink is $4,800 and red ink is $3,600.

blue ink is $8,400 and red ink is zero.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Edp Auditing A Primer

Authors: Joseph L. Sardinas

1st Edition

0471123056, 978-0471123057

More Books

Students also viewed these Accounting questions

Question

600 lb 20 0.5 ft 30 30 5 ft

Answered: 1 week ago