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Hawn Company manufactures two models of pens, a standard model and a deluxe mode

ID: 2377338 • Letter: H

Question

Hawn Company manufactures two models of pens, a standard model and a deluxe model. Three activites have been identified in the production of the pens. The following information is available:



Product:         Number of setups:          Number of Components:      Number of direct Labor Hours:

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Standard:         22,                                                8,                                                375

Deluxe               28,                                             12,                                               225





Cost Pool:                                                         Total Costs:                                    Cost Driver:

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Setup Costs:                                                      $30,000                                  Number of setups

Assembly Costs                                                $36,000                                   Number of components

Labor Costs                                                         $9,000                               Number of direct labor hours





If activity-based costing is used, the seup cost assigned to the standard model is _______________.



A. $33

B. $44,000

C. $8,400

D. $13,200

Explanation / Answer

C. $8,400



A. $33

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