Kulika Corporation manufactures two products: Product F82D and Product TO5P. The
ID: 2597219 • Letter: K
Question
Kulika Corporation manufactures two products: Product F82D and Product TO5P. 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 TO5P Activity Cost Machining Total Activity Activity Measure Total Cost Machine-hours Number of setups Number of products 44,000 Direct labor-hours $180,000 9,000 MHs 125,000 250 setups etups Product design General factory 2 products $260,000 10,000 DLRS Product TO5P Measure F82D 5,000 4,000 Number of setups Number of products 160 90 4,000 6,000 Using the ABC system, how much total manufacturing overhead cost would be assigned to Product TOSP? $156.000Explanation / Answer
B.303,000.
the following table shows it:
cost wiil be allocated using the following formula:
=>[ Total cost ] * (Product T05 P activity / total activity)
now,
COst Working Allocation to T05P Machining (180,000 * 4,000/9000) $80,000 Machine setups (125,000 * 90 /250) $45,000 Product design ($44,000* 1 /2) $22,000 General factory ($260,000 *6,000/10,000) $156,000 Total overhead assigned $303,000Related Questions
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