St.Vincent's, Inc., currently uses traditional costing procedures, applying $800,000 of overhead to products Beta and Zeta on the basis of direct labor hours. The company is considering a shift to activity-based costing and the creation of individual cost pools that will use direct labor hours (DLH), production setups (SU), and number of parts components (PC) as cost drivers.Data on the cost pools and respective driver volumes follow. The overhead cost allocated to Zeta by using activity-based costing procedures would be:
A)$240,000.
B)$356,000.
C)$444,000.
D)$560,000.
E)None of the answers is correct.

Question

St.Vincent's, Inc., currently uses traditional costing procedures, applying $800,000 of overhead to products Beta and Zeta on the basis of direct labor hours. The company is considering a shift to activity-based costing and the creation of individual cost pools that will use direct labor hours (DLH), production setups (SU), and number of parts components (PC) as cost drivers.Data on the cost pools and respective driver volumes follow.  The overhead cost allocated to Zeta by using activity-based costing procedures would be:
A)$240,000. 
B)$356,000. 
C)$444,000. 
D)$560,000. 
E)None of the answers is correct.

Quizplus · Accepted Answer

The Answer of St.Vincent's, Inc., currently uses traditional costing procedures, applying $800,000 of overhead to products Beta and Zeta on the basis of direct labor hours. The company is considering a shift to activity-based costing and the creation of individual cost pools that will use direct labor hours (DLH), production setups (SU), and number of parts components (PC) as cost drivers.Data on the cost pools and respective driver volumes follow.  The overhead cost allocated to Zeta by using activity-based costing procedures would be:
A)$240,000. 
B)$356,000. 
C)$444,000. 
D)$560,000. 
E)None of the answers is correct.

StVincent's, Inc