Under the revised ABC system, supervision costs allocated to Sweatshirts will be: (A) $48,720 B) $100,800 C) $100,920 D) None of these answers are correct.
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Arrojo Corporation manufactures two products: Product X71B and Product C91I. 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 X71B and C91I. Activity Cost Pool Activity Measure Total Cost Total Activity Machining Machine-hours $275,000 11,000 MHs Machine setups Number of setups $210,000 350 setups Product design Number of products $48,000 2 products General factory Direct labor-hours $300,000 10,000 DLHs Activity Measure Product X71B Product C91I Machine-hours 5,000 6,000 Number of setups 220 130 Number of products 1 1 Direct labor-hours 6,000 4,000 Using the plantwide overhead rate, how much manufacturing overhead cost would be allocated to Product X71B? A) $416,500. B) $499,800. C) $333,200. D) $372,000.
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Hanung Corp has two service departments, Maintenance and Personnel. The Maintenance Department costs of $360,000 are allocated on the basis of budgeted maintenance-hours. The Personnel Department costs of $110,000 are allocated based on the number of employees. The costs of operating departments A and B are $188,000 and $282,000, respectively. The data on budgeted maintenance-hours and the number of employees are as follows: Support Departments: - Maintenance Department: $360,000 - Personnel Department: $110,000 Production Departments: - Department A: $188,000 - Department B: $282,000 Budgeted maintenance-hours: - Maintenance Department: N/A - Department A: 880 - Department B: 1,230 Number of employees: - Department A: 60 - Department B: 290 - Department B: 630 Using the direct method, what amount of Maintenance Department costs will be allocated to Department B? a. $100,398 b. $128,168 c. $87,742 d. $167,330
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