Reference: 05-09
Aujla Corporation Uses Activity-Based Costing to Determine Product

Multiple Choice

Reference: 05-09
Aujla Corporation uses activity-based costing to determine product costs for external financial reports. The company has provided the following data concerning its activity-based costing system: $$\begin{array} { | l | l | } \hline \text { Activity Cost Pools (and Activity Measures) } & \text { Estimated Overhead Cost } \\\hline \text { Machine related (machine-hours) } & \$ 239,000 \\\hline \text { Batch setup (setups) } & \$ 234,900 \\\hline \text { General factory (direct labour-hours) } & \$ 159,300 \\\hline\end{array}$$ $\text { Expected Activity }$
$\begin{array}{llll}\text { Activity Cost } & \text { Total } & \text { Product } X & \text { Product } Y\\\text { Pools }\\\text { Machine related } & 10,000 & 4,000 & 6,000 \\\text { Batch setup } & 9,000 & 8,000 & 1,000 \\\text { General factory } & 9,000 & 3,000 & 6,000\end{array}$
-Assuming that actual activity turns out to be the same as expected activity, the total amount of overhead cost allocated to Product X would be closest to:

A) $357,500.
B) $235,000.
C) $316,600.
D) $563,000.