Kulka Corporation manufactures two products: Product F82D and Product T05P. The
ID: 2593239 • Letter: K
Question
Kulka Corporation manufactures two products: Product F82D and Product T05P. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products F82D and T05P.
Using the ABC system, how much total manufacturing overhead cost would be assigned to Product T05P?
Multiple Choice
$156,000
$303,000
$147,000
$304,500
Activity Cost Pool Activity Measure Total Cost Total Activity Machining Machine-hours $ 180,000 9,000 MHs Machine setups Number of setups $ 125,000 250 setups Product design Number of products $ 44,000 2 products General factory Direct labor-hours $ 260,000 10,000 DLHsExplanation / Answer
The correct answer is $ 303,000
Note :
Activity Rate :
2. Overhead Assigned:
Activity Cost Pool Activity Measure Total Cost Total Activity Activity Rate ( Total Cost / Total Activity) Machining Machine-hours $ 180,000 9,000 MHs 20.00 Machine setups Number of setups $ 125,000 250 setups 500.00 Product design Number of products $ 44,000 2 products 22,000.00 General factory Direct labor-hours $ 260,000 10,000 DLHs 26.00Related Questions
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