Peters, Inc. produces 3 products: P1, Q2, and R3. P1 requires 400 purchase orders, Q2 requires 600 purchase orders, and R3 requires 1,000 purchase orders. Peters has identified an ordering and receiving activity cost pool with allocated overhead of $240,000 for which the cost driver is purchase orders. Direct labor hours used on each product are 50,000 for P1, 40,000 for Q2, and 110,000 for R3. How much ordering and receiving overhead is assigned to each product? $\begin{array}{llll}&P1&Q2&R3\
\text { a. } & \$ 80,000 & \$ 80,000 & \$ 80,000 \
\text { b. } & \$ 60,000 & \$ 48,000 & \$ 132,000 \
\text { c. }& \$ 48,000 & \$ 72,000 & \$ 120,000 \
\text { d. } & \$ 54,000 & \$ 60,000 & \$ 126,000
\end{array}$

Question

Quizplus · Accepted Answer

The Answer of Peters, Inc. produces 3 products: P1, Q2, and R3. P1 requires 400 purchase orders, Q2 requires 600 purchase orders, and R3 requires 1,000 purchase orders. Peters has identified an ordering and receiving activity cost pool with allocated overhead of $240,000 for which the cost driver is purchase orders. Direct labor hours used on each product are 50,000 for P1, 40,000 for Q2, and 110,000 for R3. How much ordering and receiving overhead is assigned to each product? $\begin{array}{llll}&P1&Q2&R3\
\text { a. } & \$ 80,000 & \$ 80,000 & \$ 80,000 \
\text { b. } & \$ 60,000 & \$ 48,000 & \$ 132,000 \
\text { c. }& \$ 48,000 & \$ 72,000 & \$ 120,000 \
\text { d. } & \$ 54,000 & \$ 60,000 & \$ 126,000
\end{array}$