Fox Hunting Gear Manufactures Two Products: Camouflage Jackets and Camouflage

question 97

Multiple Choice

Fox Hunting Gear manufactures two products: camouflage jackets and camouflage hats. The company makes 50,000 jackets and 20,000 hats each year. Information for overhead costs and for the two products appears below.
$\begin{array}{|l|c|c|c|c|}\hline &&\text { Estimated }\\&&\text { Total }\\ \text { Activity }&\text { Driver }&\text { Overhead Cost }&\text { Jackets }&\text { Hats }\\\hline \text { Setups } & \text { \# of setups } & \$ 200,000 & 500 \text { setups } & 1,500 \text { setups } \\\hline \text { Ordering parts } & \text { \# of parts } & 300,000 & 60,000 \text { parts } & 40,000 \text { parts } \\\hline \text { Machining } & \text { \# of machine hours } & 600,000 & 12,000 \text { machine hrs. } & 6,000 \text { machine hrs. } \\\hline \text { Inspections } & \text { \# of inspections } & 400,000 & 10,000 \text { inspections } & 40,000 \text { inspections } \\\hline \text { Shipping } & \text { \# of shipments } & 300,000 & 10,000 \text { shipments } & 10,000 \text { shipments } \\\hline \text { Total overhead }&&\$1,800,000\\\hline\end{array}$
What will be the overhead cost of each jacket if overhead is assigned using ABC?

• A) $159.33 per jacket
• B) $100 per jacket
• C) $47 per jacket
• D) $17.20 per jacket

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