Stanley Company has identified the following activities related
to indirect production costs:
Activity Activity Costs Cost Drivers
Machine Setup $180,000 1,500 setup hours
Materials Handling $50,000 12,500 pounds of materials
Electric Power $20,000 20,000 kilowatt hours
Stanley Company has obtained the following data concerning two
products:
Product 1 Product 2
Number of units produced 4,000 20,000
Direct materials cost $20,000 $25,000
Direct labor cost $12,000 $20,000
Number of setup hours 100 120
Pounds of materials used 500 1,500
Kilowatt-hours 1,000 2,000
Using an activity-based costing system, what amount of materials
handling cost is assigned to Products 1 and 2?
Product 1 Product 2
a. |
$8,333 $41,667 |
|
b. |
$20,000 $30,000 |
|
c. |
$12,500 $37,500 |
|
d. |
$2,000 $6,000 |
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Stanley Company has identified the following activities related to indirect production costs: Activity Activity Costs Cost...
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