Allure Company manufactures and distributes two products, M and XY. Overhead costs are currently allocated using the number of units produced as the allocation base. The controller has recommended changing to an activity-based costing (ABC) system. She has collected the following information:
Activity Cost Driver Amount M XY
Production setups Number of setups $72,000 12 28
Material handling Number of parts 50,000 54 36
Packaging costs Number of units 355,000 108,000 72,000
$477,000
What is the total overhead allocated to Product XY using the current system?
a. $212,400.
b. $190,800.
c. $264,600.
d. $286,200.
Answers: 2
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