Accola Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A is 1,100 units and of Product B is 700 units. There are three activity cost pools, with estimated costs and expected activity as follows:
-If the materials handling cost is allocated on the basis of direct labor-hours, how much of the total materials handling cost would be allocated to the prefab barns? (Round off your answer to the nearest whole dollar.)
Definitions:
NPV
Net Present Value (NPV) is a financial metric used to evaluate the profitability of an investment or project by discounting all expected future cash flows back to their present value.
Profitability Index
A financial tool that calculates the relationship between the costs and benefits of a project by dividing the present value of future cash flows by the initial investment cost.
Mutually Exclusive
Situations or events that cannot occur at the same time—choosing one precludes the selection of the other.
Negative Net Present Value
A financial metric indicating that the present value of cash inflows is less than the present value of cash outflows, suggesting the investment is not financially viable.
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