Question

Mason Company uses activity-based costing and has the following costs: machine setup $25,000; machine repair $10,000; selling expenses $5,000 and factory maintenance of $2,500. Total cost allocated to the setup activity pool is ___.

Answer 1

Answer:

$37,500

Explanation:

Setup cost is the cost requires to setup the machine and make it ready for the a new job / batch.

Machine setup cost                          = 25,000

Machine repair                                  = 10,000

Factory maintenance cost                = 2,500

Total Cost allocated to setup pool  = 37,500

*There is no basis available to allocate the cost to different segment / department so, all the eligible cost has been added.