Reynoso Corporation manufactures titanium and aluminum tennis racquets. Reynoso\

Question

Reynoso Corporation manufactures titanium and aluminum tennis racquets. Reynoso's total overhead costs consist of assembly costs and inspection costs. The following information is available: Cost Titanium Aluminum Assembly500 mach. hours500 mach. hours Inspections Total Cost $51000 350 2100 labor hours 150 1900 labor hours $104000 Reynoso is considering switching from one overhead rate Using activity-based costing, how much inspections cost is assigned to titanium racquets? based on labor hours to activity-based costing O $53600. O $72800. o $52000. O $31200.

Explanation / Answer

Inspections cost assigned to Titanium raquets :

[ $104,000 / (350 + 150) ] * 350 = $72,800 (option B)

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