Carrol Company,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 $158,400.
If the setup costs are allocated using number of setups,how much of the total setup costs would be allocated to boat trailers?
A)$98,560
B)$59,840
C)$158,400
D)$419,294

Question

Carrol Company,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 $158,400.
If the setup costs are allocated using number of setups,how much of the total setup costs would be allocated to boat trailers?
A)$98,560 
B)$59,840 
C)$158,400 
D)$419,294

Quizplus · Accepted Answer

A)340 + 560 = 900 total setups
$158,400 / 900 = 176.00
$176.00 × 560 = $98,560

Carrol Company,which Uses an Activity-Based Costing System,produces Travel Trailers and Boat