WILL THUMBS UP UPON SOLVING (MUST BE CORRECT WITH MULTIPLE CHOICE)

In its first year of operations a company produced and sold 70,000 units of Product A and 17,500 units of Product B. Additional information relating to the companys only two products is shown below:

	Product A	Product B	Total
Direct materials	$ 436,300	$ 251,700	$ 688,000
Direct labor	$ 200,000	$ 104,000	304,000

The companys direct labor wage rate is $20 per hour. It created an activity-based costing system that allocated all of its manufacturing overhead costs to three activities as follows:

Activity Cost Pool (and Activity Measure)	Manufacturing Overhead	Activity
		Product A	Product B	Total
Machining (machine-hours)	$ 213,500	81,300	71,200	152,500
Setups (setup hours)	157,500	75	300	375
Product design (number of products)	237,000	1	1	2
Total manufacturing overhead cost	$ 608,000

The companys activity-based costing system would allocate how much manufacturing overhead to Product A?

Multiple Choice:

$261,820

$259,820

$265,820

$263,820