Allure Company Manufactures and Distributes Two Products, M and XY

question 17

Multiple Choice

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:
$$\begin{array} { l l r r r } \text { Activity } & \text { Cost Driver } & \text { Amount } & { \text { M } } & { \text { XY } } \\\text { Production setups } & \text { Number of setups } &8 2 , 0 0 0 &8 & 12 \\\text { Material hardling } & \text { Number of parts } & 48,000 & 56 & 24 \\\text { Packaging costs } & \text { Number of urits } & 130,000 & 80,000 & 50,000 \\& &\$ 2 6 0 , 0 0 0 & &\end{array}$$
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What is the total overhead allocated to Product M using the current system?

• A) $113,600.
• B) $130,000.
• C) $146,400.
• D) $160,000.

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Definitions:

New Information

Newly acquired data or knowledge that was not known previously.

Intrusive Memories

Unwanted, involuntary memories that are often distressing and related to traumatic events, frequently occurring in post-traumatic stress disorder (PTSD).

Emotionally Traumatic Experience

An event or situation that causes significant emotional distress, potentially leading to lasting psychological impact.

Proactive Interference

The tendency for older memories to interfere with the retrieval of newer memories.