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 cost drivers/location bases: What is the amount of overhead cost to be assigned to Product B using labour hours as the allocation base?

A) £58,000
B) £43,500
C) £11,600
D) £46,400

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 cost drivers/location bases: What is the amount of overhead cost to be assigned to Product B using labour hours as the allocation base?
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 cost drivers/location bases: What is the amount of overhead cost to be assigned to Product B using labour hours as the allocation base? A) £58,000 B) £43,500 C) £11,600 D) £46,400

A) £58,000 
B) £43,500 
C) £11,600 
D) £46,400

Quizplus · Accepted Answer

Based on the information provided in the table, the overhead cost assigned to Product B using labour hours as the allocation base is calculated as follows: 
Labour hours for Product B = 2,900 
Overhead cost allocated to Product B using labour hours = (2,900/10,450) x £58,000 = £16,100 
Thus, the total overhead cost assigned to Product B, including all three cost pools, is: 
£16,100 + £30,000 + £100 = £46,400. 
Therefore, the correct answer is D.

Yang Manufacturing Company Manufactures Two Products (A and B)