Solved: How much of the setup cost are allocated to the mini model, Cost Accounting

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How much of the setup cost are allocated to the mini model

Response to the following problem:

Sofa Company manufactures two models of its couch, the Mini and the Maxi. The Mini model requires 10,000 direct labor hours and the Maxi model requires 40,000 direct labor hours. The company produces 4,000 units of the Mini model and 1,000 units of the Maxi model each year. The company produces the Mini model in batch sizes of 200, while it produces the Maxi model in batch size of 100. The company expects to incur $240,000 of total setup costs this year.

How much of the setup cost are allocated to the Mini model using the ABC costing?

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Cost Accounting: How much of the setup cost are allocated to the mini model

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Cost Accounting: How much of the setup cost are allocated to the mini model

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