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Question: xaa is considering different costing options they are now using...

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XAA is considering different costing options. They are now using a  traditional costing procedures which applies overhead  on the basis of direct labor hours. They have two products, A and B. XAA is considering a shift to activity-based costing and has created three cost pools that will use Machine hours (MH), setups,  and number of parts as cost drivers. Data on the cost pools and respective driver are shown below.                                    
 

                                   Pool No 1                      Pool No 2                      Pool No 3

Product                      Driver: Machine hours Driver: Setups                 Driver: Parts

A                                1200                               45                                  2,250

B                                2800                               55                                     750

Pool cost                   $160,000                        $280,000                       $360,000

Total overhead is $800,000

The overhead cost allocated to product A by using activity-based costing procedures would be:
a.
$240,000.
b.
$356,000.
c.
$444,000.
d.
$560,000.
e.
some other amount.

 

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