Use the information below to answer the following question(s):
Louis Corporation, which uses an activity-based costing system, produces travel trailers and boat trailers. The company allocates batch setup costs to the two products using the following basic data:

Total budgeted setup costs for the year are $140,000.
-If the setup costs are allocated using number of setups, how much of the total setup costs would be allocated to boat trailers?
A) $66,500
B) $73,500
C) $140,000
D) $294,737

Question

Use the information below to answer the following question(s):
Louis Corporation, which uses an activity-based costing system, produces travel trailers and boat trailers. The company allocates batch setup costs to the two products using the following basic data:
  
Total budgeted setup costs for the year are $140,000.
-If the setup costs are allocated using number of setups, how much of the total setup costs would be allocated to boat trailers?
A) $66,500 
B) $73,500 
C) $140,000 
D) $294,737

Quizplus · Accepted Answer

B) $140,000 × 420/(380+420) = $140,000 × .525 = 73,500

Use the Information Below to Answer the Following Question(s)