Figure 4-11 Yang Manufacturing Company manufactures two products (A and B).The overhead costs ($58,000) have been divided into three cost pools that use the following activity drivers:

- Refer to Figure 4-11.Using functional-based costing, what is the amount of overhead cost to be assigned to Product B using labor hours as the allocation base?
A) $58,000
B) $43,500
C) $11,600
D) $46,400

Question

Figure 4-11 Yang Manufacturing Company manufactures two products (A and B).The overhead costs ($58,000) have been divided into three cost pools that use the following activity drivers:

- Refer to Figure 4-11.Using functional-based costing, what is the amount of overhead cost to be assigned to Product B using labor hours as the allocation base?
A) $58,000 
B) $43,500 
C) $11,600 
D) $46,400

Quizplus · Accepted Answer

Product B uses 8,800 labor hours (2,200 hours x 4 employees) out of the total of 11,000 labor hours used by both products. Therefore, using labor hours as the allocation base, the amount of overhead cost to be assigned to Product B is:
($58,000 / 11,000 labor hours) x 8,800 labor hours = $46,400.

Figure 4-11 Yang Manufacturing Company Manufactures Two Products (A and B).The