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hcraik2 hcraik2
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A month ago
Gooding Company manufactures two models of its skillet, the Kitchen and the Campfire. The Kitchen model requires 10,000 direct labor hours and the Campfire requires 30,000 direct labor hours. The company produces 3,400 units of the Kitchen model and 600 units of the Campfire model each year. The company inspects one Kitchen for every 100 produced and inspects one Campfire for every 10 produced. The company expects to incur $84,600 of total inspecting costs this year. How much of the inspecting costs should be allocated to the Kitchen model using ABC costing?

▸ $30,600

▸ $42,300

▸ $21,150

▸ $71,910
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Managerial Accounting

Managerial Accounting


Edition: 4th
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miil41miil41
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A month ago
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$30,600

Total number of Inspections: Kitchen = 3,400 units ÷ 100 = 34 inspections; Campfire = 600 units ÷ 10 = 60 inspections
Total inspections = 34 + 60 = 94;
$84,600 × (34 ÷ 94) = $30,600;
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