Suppose a small business has sales of $14,000 this month, with future sales expected to grow by $1,300 each month. Costs consist
1 answer:
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Answer:
b. $303,000
Explanation:
The activity rate
1. Machining =
= $ 20 per machine hour
2. Machine set up =
= $ 500 per set up
3. Product design =
= $ 22000 per product
4. Order size =
= $ 26 per direct labor hour
Now the ABC cost (Product T05P)
1. Machining =
= 4000 x 20
= $ 80,000
2. Machine set ups =
= 90 x 500
= $ 45,000
3. Product design =
= 1 x 22000
= $ 22,000
4. Order size =
= 6000 x 26
= $ 156,000
Therefore, the total manufacturing overhead cost assigned to product T05P = 80000 + 45000 + 22000 + 156000
= $ 303,000