Question

8. Assume that a pet food manufacturer is considering adding two types of pet food to its existing product line. Research had determined that good demand exists for dog food in 40-pound bags and cat food in 0.5 pound cans. The company identified the following partial list of activities, costs, and activity drivers expected for the next year: Activity Expected Costs Cost Driver Material handling $ 105,000 Number of batches made Storage costs $ 820,000 Weight of finished product Dog Food Cat Food Production volume 100,000 units 200,000 units Batches made 200 batches 150 batches How much overhead cost will be assigned to each product line using activity-based costing (ABC)? Group of answer choices Dog food: $800,000; cat food: $20,000. Dog food: $860,000; cat food: $65,000. Dog food: $462,500; cat food: $462,500. Dog food: $320; cat food: $320. Dog food: $60,000; cat food: $45,000.

Answer 1

Dog Food Cat Food Particulars Handling Materials 105000*200/350 105000*150/350 $ 60,000 $ 45,000 Storage Costs 820000*4000000/4100000 $ 820000*100000/4100000 Total Overhead Costs $ 800,000 $ 860,000 $ 20,000 65,000 Note : Do Comment For Any Further Assistance