Reynoso Corporation Manufactures Titanium and Aluminum Tennis Racquets Reynoso Is Considering Switching from One Overhead Rate Based on Costs

question 88

Multiple Choice

Reynoso Corporation manufactures titanium and aluminum tennis racquets.Reynoso's total overhead costs consist of assembly costs and inspection costs.The following information is available: $\begin{array}{lccc}\text { Cost }&\text { Titanium }&\text { Aluminum }&\text { Total Cost }\\\text { Assembly } & 500 \text { mach. hours } & 500 \text { mach. hours } & \$ 60,000 \\\text { Inspections } & 350 & 150 & \$ 100,000 \\& 2,100 \text { labor hours } & 1,900 \text { labor hours } &\end{array}$ Reynoso is considering switching from one overhead rate based on labor hours to activity-based costing. Total overhead costs assigned to titanium racquets, using a single overhead rate, are

• A)$80,000.
• B)$84,000.
• C)$100,000.
• D)$112,000.

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