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Bunker makes two types of briefcase, fabric and leather.
Bunker makes two types of briefcase, fabric and leather. The company is currently using a traditional costing system with labor hours as the cost driver but is considering switching to an activity-based costing system. In preparation for the possible switch, Bunker has identified two activity cost pools: materials handling and setup. Pertinent data follow:
Fabric Case Leather Case
Number of labor hours 15,000 10,000
Number of material moves 551 899
Number of setups 56 84
1. (Do not round intermediate calculations.)
I got 89,300 as the overhead assigned (This answer is correct)