Tierra Co, incurs $240,000 overhead costs each year in its three main departments, setup ($15,000), machining ($165,000), and pa

Question

2 years ago

9

Tierra Co, incurs $240,000 overhead costs each year in its three main departments, setup ($15,000), machining ($165,000), and pa

cking ($60,000). The setup department performs 40 setups per year, the machining department works 5,000 hours per year, and the packing department packs 500 orders per year. Information about Tierra's two products is as follows:
Product A1 Product B1
Number of setups 20 20
Machining hours 1,000 4,000
Orders packed 150 350
Number of products manufactured 600 400

Using ACTIVITY-BASED COST, how much OVERHEAD is assigned to PRODUCT B1 each year?

A) $120,000
B) $96,000
C) $181,000
D) $192,000

Business