Question

A company uses activity-based costing. The company produces two products, 001 and 002.

Information relating to 001 is as follows:

Units produced: 38,000
Machine-hours: 15,000
Direct labor hours: 16,000
Materials handling (number of moves): 8,000
Setups: 10,000

Information for 002 is as follows:

Units produced: 50,000
Machine-hours: 17,000
Direct labor-hours: 24,000
Materials handling (number of moves): 12,000
Setups: 14,000

The following costs are reported:

Materials handling: $160,000
Labor-related overhead: $480,000
Setups: $240,000

What is the setup cost assigned to product 002?

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