Canterra Co Using ABC, How Much Overhead Is Assigned to Product Two

question 21

Multiple Choice

Canterra Co.incurs $160,000 of overhead costs each year in its three main departments, setup ($10,000) , machining ($110,000) , and packing ($40,000) .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 Canterra's 2 products is as follows: $\begin{array}{lll}& \underline{\text { Product One }}& \underline{\text {Product Two }}\\\text { Number of setups } & 20 & 20 \\\text { Machining hours } & 1,000 & 4,000 \\\text { Orders packed } & 150 & 350 \\\text { Number of product } & &\\\text { Manu?fartured }&600&400\end{array}$ Using ABC, how much overhead is assigned to Product Two each year?

• A)$80,000
• B)$64,000
• C)$121,000
• D)$128,000

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Definitions:

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