Figure 4-21 Jones Manufacturing uses an activity-based costing system.The company produces Model X and Model Y.Information relating to the two products is as follows:
The following overhead costs are reported for the following activities of the production process:
Jones manufacturing has used activity based costing to assign costs to Models X and Y as given in the table below:
Jones Manufacturing wants to implement an approximately relevant ABC system by using the two most expensive activities for cost assignment.
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Refer to Figure 4-21.Under this new approach, what cost would be assigned to the labor related cost pool?

Question

Figure 4-21 Jones Manufacturing uses an activity-based costing system.The company produces Model X and Model Y.Information relating to the two products is as follows:
 The following overhead costs are reported for the following activities of the production process:
 Jones manufacturing has used activity based costing to assign costs to Models X and Y as given in the table below:
 Jones Manufacturing wants to implement an approximately relevant ABC system by using the two most expensive activities for cost assignment.
-
Refer to Figure 4-21.Under this new approach, what cost would be assigned to the labor related cost pool?

Quizplus · Accepted Answer

The cost assigned to the labor-related cost pool is $255,000, as indicated by the new approach described in the context of Figure 4-21.

Figure 4-21 Jones Manufacturing Uses an Activity-Based Costing System