Business, 04.07.2020 01:01 twalters88

Horgen Corporation manufactures two products: Product M68B and Product H27T. The company 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 M68B and H27T. Activity Cost Pool Activity Measure Total Cost Total Activity
Machining Machine-hours $299,000 13,000 MHs
Machine setups Number of setups $240,000 400 setups
Product design Number of products $80,000 2 products
Order size Direct labor-hours $290,000 10,000 DLHs

Activity Measure Product Product
Machine-hours M68B H27T
Number of setups 6,000 7,000
Number of products 250 150
Direct labor-hours 4,000 6,000

Using the ABC system, how much total manufacturing overhead cost would be assigned to Product H27T?
a. $291,000
b. $174,000
c. S465,000
d. $454,500

Answers: 3

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Answer from: 20578jb

The total manufacturing overhead cost that would be assigned to Product H27T is $465,000.

Product H27T Machining = $299,000/13,000 × 7,000

Product H27T Machining = $23 × 7,000

Product H27T Machining = $161,000

Product H27T Machine set up = $240,000/400 × 150

Product H27T Machine set up = $600 × 150

Product H27T Machine set up = $90000

Product H27T Product design = $80,000/2

Product H27T Product design = $40,000

Product H27T Order size = $290,000/10,000 × 6,000

Product H27T Order size = $29 × 6,000

Product H27T Order size = $174,000

Total manufacturing overhead cost = $161,000 + $90,000 + $40,000 + $174,000

Total manufacturing overhead cost = $465,000

In conclusion, the total manufacturing overhead cost that would be assigned to Product H27T is $465,000.

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Answer from: Lawrence101

$465,000

Explanation:

The activity-based costing (ABC) is used to know the total cost of activities that is vital to make a product. In ABC system, for every activity which goes into production, a cost will be assigned.

Based on the figures in the question, the following can be deduced:

Machining:

= 299,000/13,000 × 7,000

= 23 × 7,000

= $161,000

Machine set up:

= 240,000/400 × 150

= 600 × 150

= $90000

Product design:

= 80,000/2

= $40,000

Order size:

= 290,000/10,000 × 6,000

= 29 × 6,000

= $174,000

Total = $161,000 + $90,000 + $40,000 + $174,000

= $465,000

The total manufacturing overhead cost that would be assigned to Product H27T is $465,000.

Answer from: Quest

explanation:

Answer from: Quest

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Horgen Corporation manufactures two products: Product M68B and Product H27T. The company is consider...

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