Pro Tool Company Expects to Produce 24,000 Total Units During

question 119

Multiple Choice

Pro Tool Company expects to produce 24,000 total units during the current period.The costs and cost drivers associated with four activity cost pools are given below: $\begin{array}{lcccc}\text { ACTIVITIES: } & \text { UNIT } & \text { BATCH } & \text { PRODUCT } & \text { FACILITY } \\& \text { LEVEL } & \text { LEVEL } & \text { LEVEL } & \text { LEVEL } \\\hline\text { Cost } & \$ 50,000 & ? & \$ 10,000 & \$ 120,000 \\ \text { Cost Driver } & \text { 4,000 labor hrs} & 100 \text { set ups } & \% \text { of use } & 24,000 \text { units } \\\end{array}$
Production of 1,000 units of an auto towing tool required 800 labor hours and 12 setups and consumed 30% of the product sustaining activities.How much total overhead cost will be allocated to this product if the company allocates overhead using a single overhead allocation rate based on direct labor hours?

• A) $18,400
• B) $10,000
• C) $100,000
• D) $40,000