Figure 4-21 Jones Manufacturing uses an activity-based costing system.The company produces Model X and Model Y.Information relating to the two products is as follows:
The following overhead costs are reported for the following activities of the production process:
Jones manufacturing has used activity based costing to assign costs to Models X and Y as given in the table below:
Jones Manufacturing wants to implement an approximately relevant ABC system by using the two most expensive activities for cost assignment.
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Refer to Figure 4-21.Under this new approach using consumption ratios for labor related and machine hours, the overhead cost assigned to Model X would be? (round to 5 decimal places)
A) $74,179.50
B) $209,099.89
C) $255,000
D) $435,870.50

Question

Figure 4-21 Jones Manufacturing uses an activity-based costing system.The company produces Model X and Model Y.Information relating to the two products is as follows:
 The following overhead costs are reported for the following activities of the production process:
 Jones manufacturing has used activity based costing to assign costs to Models X and Y as given in the table below:
 Jones Manufacturing wants to implement an approximately relevant ABC system by using the two most expensive activities for cost assignment.
-
Refer to Figure 4-21.Under this new approach using consumption ratios for labor related and machine hours, the overhead cost assigned to Model X would be? (round to 5 decimal places)
A) $74,179.50 
B) $209,099.89 
C) $255,000 
D) $435,870.50

Quizplus · Accepted Answer

The correct overhead cost assigned to Model X using the new approach with consumption ratios for labor-related and machine hours is $209,099.89. This is calculated based on the specific consumption ratios provided in the problem context, which are not visible here but lead to this result.

Figure 4-21 Jones Manufacturing Uses an Activity-Based Costing System