Fluffy Towel Company manufactures two products, Mini A and Maxi B. Fluffy's overhead costs consist of setting up machines- $800,000; machining- $2,000,000; and inspecting- $600,000. Information on the two products is:
Direct labour hours Mini A Maxi B
15,000 25,000
Machine setups 600 400
Machine hours 24,000 26,000
Inspections 800 700
Overhead applied to Mini A using traditional costing and direct labour hours is
a. $1,275,000.
b. $1,536,000.
c. $1,670,000.
Od. $1,700,000