Rocket Products manufactures three types of remote-control devices: Economy, Standard, and Deluxe. The company, which...
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Rocket Products manufactures three types of remote-control devices: Economy, Standard, and Deluxe. The company, which uses activity-based costing, has identified five activities (and related cost drivers). Each activity, its budgeted cost, and related cost driver is identified below. Activity Cost Cost Driver Material handling $ 227,000 Number of parts Material insertion 2,477,000 Number of parts Automated machinery 842,000 Machine hours Finishing 172,000 Direct labor hours Packaging 172,000 Orders shipped Total $ 3,890,000 The following information pertains to the three product lines for next year: Economy Standard Deluxe Units to be produced 10,200 5,200 2,200 Orders to be shipped 1,020 520 220 Number of parts per unit 10 15 25 Machine hours per unit 1 3 5 Labor hours per unit 2 2 2 Assume that Rocket is using a volume-based costing system, and the preceding overhead costs are applied to all products on the basis of direct labor hours. The overhead cost that would be assigned to the Standard product line is closest to: Multiple Choice $486,250. $678,650. $967,118. $1,149,318. None of the answers is correct
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