Canterra Co If Machining Hours Are Used as a Base, How Much

question 28

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: $$\begin{array} { l r r } & \underline{\text { Product One }} & \underline{\text { Product Two }} \\ \text { Number of setups } & 20 & 20 \\\text { Machining hours } & 1,000 & 4,000 \\\text { Orders packed } & 150 & 350\end{array}$$ If machining hours are used as a base, how much overhead is assigned to Product One each year?

• A)$32,000
• B)$80,000
• C)$55,000
• D)$48,000

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