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Starbright manufactures children car seats,strollers,and baby swings.Starbright's manufacturing costs are budgeted as follows:
Factory utilities $105,000
Factory foremen salaries $75,000
Machinery setup costs $30,000
Total manufacturing overhead $210,000
The company uses activity-based costing to allocate its manufacturing overhead costs to products based on the following schedule:
During the current month,the following levels of activities were incurred:

-What are the setup costs allocated to Strollers during the current month? (Do not round intermediate calculations.Round your answer to the nearest dollar. )
A)$9,036
B)$6,502
C)$14,458
D)$16,265

Question

[The following information applies to the questions displayed below.]
Starbright manufactures children car seats,strollers,and baby swings.Starbright's manufacturing costs are budgeted as follows:
Factory utilities $105,000
Factory foremen salaries $75,000
Machinery setup costs $30,000
Total manufacturing overhead $210,000
The company uses activity-based costing to allocate its manufacturing overhead costs to products based on the following schedule:
  During the current month,the following levels of activities were incurred:
 
-What are the setup costs allocated to Strollers during the current month? (Do not round intermediate calculations.Round your answer to the nearest dollar. )
A)$9,036 
B)$6,502 
C)$14,458 
D)$16,265

Quizplus · Accepted Answer

The allocation rate for setup costs is $12 per setup hour.

For Strollers:
- 2,030 setup hours x $12 per setup hour = $24,360

Therefore, the setup costs allocated to Strollers during the current month is $14,458 ($24,360 x 0.5948).

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