Auburn, Inc.'s overhead costs of $700,000 consist of machining $400,000; inspecting $200,000; and packaging $100,000.Machining works 4,000 hours a year, 500 inspections occur each year, and 1,000 packing order occur each year.Information on the company's two products are as follows: How much overhead is allocated to Omega using a single overhead rate (based on direct labor hours) and using ABC, respectively?
A)$340,000 and $360,000
B)$340,000 and $175,000
C)$360,000 and $175,000
D)$360,000 and $525,000

Question

Auburn, Inc.'s overhead costs of $700,000 consist of machining $400,000; inspecting $200,000; and packaging $100,000.Machining works 4,000 hours a year, 500 inspections occur each year, and 1,000 packing order occur each year.Information on the company's two products are as follows:  How much overhead is allocated to Omega using a single overhead rate (based on direct labor hours) and using ABC, respectively?
A)$340,000 and $360,000 
B)$340,000 and $175,000 
C)$360,000 and $175,000 
D)$360,000 and $525,000

Quizplus · Accepted Answer

The Answer of Auburn, Inc.'s overhead costs of $700,000 consist of machining $400,000; inspecting $200,000; and packaging $100,000.Machining works 4,000 hours a year, 500 inspections occur each year, and 1,000 packing order occur each year.Information on the company's two products are as follows:  How much overhead is allocated to Omega using a single overhead rate (based on direct labor hours) and using ABC, respectively?
A)$340,000 and $360,000 
B)$340,000 and $175,000 
C)$360,000 and $175,000 
D)$360,000 and $525,000