X-Ray Machines Ltd Assume That X-Ray Is Using a Volume-Based Costing System, and Superior

Multiple Choice

X-Ray Machines Ltd. manufactures three product lines: Standard, Deluxe, and Superior. The company, which uses activity-based costing, has identified five activities (and related cost drivers) . Each activity, its budgeted cost, and related cost driver is identified below. The following information pertains to the three product lines for next year: $\begin{array}{|l|r|r|r|}\hline & \text { Standard } & \text { Deluxe } & \text { Supe rior } \\\hline \text { Units to be produced } & 15,000 & 10,000 & 7,000 \\\hline \text { Orders to be shipped } & 1,000 & 500 & 500 \\\hline \text { Number of parts per unit } & 10 & 15 & 25 \\\hline \text { Machine hours per unit } & 3 & 5 & 7 \\\hline \text { Labour hours per unit } & 2 & 2 & 2 \\\hline\end{array}$ Assume that X-Ray is using a volume-based costing system, and the preceding manufacturing costs are applied to all products based on direct labour hours. How much of the preceding cost, rounded to the nearest dollar, would be assigned to Deluxe?

A) $240,625.
B) $481,250.
C) $962,500.
D) $1,375,000.
E) $2,200,000.