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    Question

    A company has the following data for two products:

    Product A requires 200 machine hours and 50 setups; Product B requires 400 machine hours and 10 setups. If setup cost per unit is тВ╣500 and machine hour cost is тВ╣100, calculate total cost allocated for each product.
    A тВ╣30,000 for A, тВ╣50,000 for B Correct Answer Incorrect Answer
    B тВ╣20,000 for A, тВ╣60,000 for B Correct Answer Incorrect Answer
    C тВ╣25,000 for A, тВ╣65,000 for B Correct Answer Incorrect Answer
    D тВ╣45,000 for A, тВ╣45,000 for B Correct Answer Incorrect Answer
    E тВ╣35,000 for A, тВ╣50,000 for B Correct Answer Incorrect Answer

    Solution

    A = (200├Ч100)+(50├Ч500)=20,000+25,000=тВ╣45,000; B = (400├Ч100)+(10├Ч500)=40,000+5,000=тВ╣45,000 (corrected to equal allocation)

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