Question

Vroom-Vroom manufactures miniature cars and has determined that its total manufacturing cost of $1,500,000 is a mixture of unit-level costs, product-level costs, and facility-level costs. Vroom-Vroom has assembled the following information concerning the manufacturing costs and the driver used to allocate the costs in each activity pool (units and product lines). Facility-level costs are not allocated to production. Total Manufacturing Costs Collector Products Retail Products Unit-level costs $600,000 200,000 units 800,000 units Product-level costs 700,000 25 lines 30 lines Facility costs 200,000 N/A N/A $1,500,000 How much cost would be allocated to the Retail division under an activity-based costing system that reflects an appropriate hierarchy? (Please round to the nearest dollar at the end of your calculations)

Answer 1

Answer:

$784,434 will be allocated to the Retail division

Explanation:

See attached file