RS Company manufactures and distributes two products,R and S.Overhead costs are currently allocated using the number of units produced as the allocation base.The controller has recommended changing to an activity-based costing (ABC)system.She has collected the following information: What is the total overhead allocated to Product S using the current system?
A)$113,600.
B)$100,000.
C)$146,400.
D)$160,000.

Question

RS Company manufactures and distributes two products,R and S.Overhead costs are currently allocated using the number of units produced as the allocation base.The controller has recommended changing to an activity-based costing (ABC)system.She has collected the following information:  What is the total overhead allocated to Product S using the current system?
A)$113,600. 
B)$100,000. 
C)$146,400. 
D)$160,000.

Quizplus · Accepted Answer

According to the current system, overhead costs are allocated using the number of units produced as the allocation base.

For Product S:

Total overhead allocated = $100,000 ($10 per unit x 10,000 units)

RS Company Manufactures and Distributes Two Products,R and S