Yang Manufacturing Company manufactures two products (A and B). The overhead costs ($58,000) have been divided into three cost pools that use the following activity drivers:
$\begin{array}{ccrr}
&&\text { Number of Labour }\
\underline{\text { Product }}&\underline{\text { Number of Orders }} & \underline{\text { Transactions }} & \underline{\text { Labour Hours }}\
\text { A } & 15 & 50 & 500 \
\text {B} & 10 & 150 & 2,000 \\
\text { Cost per pool } & \$ 10,000 & \$ 8,000 & \$ 40,000
\end{array}$

-Refer to the figure.What is the allocation rate per labour transaction using ABC?
A)$16
B)$40
C)$8,000
D)$29,000

Question

Yang Manufacturing Company manufactures two products (A and B). The overhead costs ($58,000) have been divided into three cost pools that use the following activity drivers:
$\begin{array}{ccrr}
&&\text { Number of Labour }\
 \underline{\text { Product }}&\underline{\text { Number of Orders }} & \underline{\text { Transactions }} & \underline{\text { Labour Hours }}\
\text { A } & 15 & 50 & 500 \
\text {B} & 10 & 150 & 2,000 \\
\text { Cost per pool } & \$ 10,000 & \$ 8,000 & \$ 40,000
\end{array}$

-Refer to the figure.What is the allocation rate per labour transaction using ABC?
A)$16
B)$40
C)$8,000
D)$29,000

Quizplus · Accepted Answer

The allocation rate per labor transaction using Activity-Based Costing (ABC) is calculated by dividing the total cost of the labor transactions pool by the total number of labor transactions. The total cost for the labor transactions pool is $8,000, and the total number of labor transactions is 200 (50 from Product A + 150 from Product B). Therefore, the allocation rate per labor transaction is $8,000 / 200 = $40.

Yang Manufacturing Company Manufactures Two Products (A and B) -Refer to the Figure