Figure 4-21 Jones Manufacturing Uses an Activity-Based Costing System

Multiple Choice

Figure 4-21 Jones Manufacturing uses an activity-based costing system.The company produces Model X and Model Y.Information relating to the two products is as follows:
The following overhead costs are reported for the following activities of the production process:
Jones manufacturing has used activity based costing to assign costs to Models X and Y as given in the table below:
Jones Manufacturing wants to implement an approximately relevant ABC system by using the two most expensive activities for cost assignment.
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Refer to Figure 4-21.Under this new approach using consumption ratios for labor related and machine hours, what allocation rate would be used to assign labor related costs? (round to 5 decimal places)

A) 0.85455
B) 0.60
C) 0.46875
D) 0.53125