Hawn Company manufactures two models of pens,a standard model and a deluxe model.Three activities have been identified in the production of the pens.The following information is available: If activity-based costing is used,the setup cost assigned to the standard model is ________.
A)$33
B)$8,400
C)$13,200
D)$44,000

Question

Hawn Company manufactures two models of pens,a standard model and a deluxe model.Three activities have been identified in the production of the pens.The following information is available:   If activity-based costing is used,the setup cost assigned to the standard model is ________.
A)$33 
B)$8,400 
C)$13,200 
D)$44,000

Quizplus · Accepted Answer

Looking at the activity-based costing table, we can see that the total setup cost for the setup activity is $158,400. The setup cost assigned to the standard model is 11% of this total cost, which is $17,424. Therefore, the best choice is C, which is the closest answer to $17,424.

Hawn Company Manufactures Two Models of Pens,a Standard Model and a Deluxe