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Bonita Company manufactures two models of its banjo, the Basic and the Luxury. The Basic model requires 10000 direct labor hours and the Luxury requires 42000 direct labor hours. The company produces 4000 units of the Basic model and 600 units of the Luxury model each year. The company inspects one Basic for every 100 produced, and inspects one Luxury for every 10 produced. The company expects to incur $190000 of total inspecting overhead costs this year. What amount of the inspecting costs should be allocated to the Basic model using ABC? O $36538 O $95000 O $76000 O $165217

Bonita Company manufactures two models of its banjo, the Basic and the Luxury. The Basic model requires 10000 direct labor hours and the Luxury requires 42000 direct labor hours. The company produces 4000 units of the Basic model and 600 units of the Luxury model each year. The company inspects one Basic for every 100 produced, and inspects one Luxury for every 10 produced. The company expects to incur $190000 of total inspecting overhead costs this year. What amount of the inspecting costs should be allocated to the Basic model using ABC? O $36538 O $95000 O $76000 O $165217

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Bonita Company manufactures two models of its banjo, the Basic and the Luxury. The Basic model requires 10000 direct labor hours and the Luxury requires 42000 direct labor hours. The company produces 4000 units of the Basic model and 600 units of the Luxury model each year. The company inspects one Basic for every 100 produced, and inspects one Luxury for every 10 produced. The company expects to incur $190000 of total inspecting overhead costs this year. What amount of the inspecting costs should be allocated to the Basic model using ABC? O $36538 O $95000 O $76000 O $165217
Transcribed Image Text:Bonita Company manufactures two models of its banjo, the Basic and the Luxury. The Basic model requires 10000 direct labor hours and the Luxury requires 42000 direct labor hours. The company produces 4000 units of the Basic model and 600 units of the Luxury model each year. The company inspects one Basic for every 100 produced, and inspects one Luxury for every 10 produced. The company expects to incur $190000 of total inspecting overhead costs this year. What amount of the inspecting costs should be allocated to the Basic model using ABC? O $36538 O $95000 O $76000 O $165217
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