Figure 4-16 Samson Company Recently Installed an Activity-Based Relational Database

Multiple Choice

Figure 4-16 Samson Company recently installed an activity-based relational database. Using the information contained in the activity relational table, the following pool rates were computed:
$400 per purchase order
$24 per machine hour, Process 1
$30 per machine hour, Process 2
$80 per engineering hour
Two products are produced by Special Products: L and M. The plant has two manufacturing processes, Process 1 and Process 2. Other processes include engineering, product handling, and procurement. Product L goes through Process 1 while Product M goes through Process 2. The product relational table for Special Products is as follows:
Refer to Figure 4-16. How much purchasing overhead cost will be assigned to Product L using the number of purchase orders?

A) $ 100,000
B) $ 50,000
C) $80,000,000
D) $ 133,500