Allure Company manufactures and distributes two products, M and XY. Overhead costs are currently allocated...
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Accounting
Allure Company manufactures and distributes two products, M and XY. 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:
| Activity | Cost Driver | Amount | M | XY | ||||
| Production setups | Number of setups | $ | 84,000 | 20 | 30 | |||
| Material handling | Number of parts | 47,000 | 45 | 30 | ||||
| Packaging costs | Number of units | 306,500 | 105,000 | 70,000 | ||||
| $ | 437,500 | |||||||
What is the total overhead allocated to Product M using the current system?
$191,800.
$306,500.
$245,700.
$262,500.
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