## Question

###### Required information M4-8 and M4-9 Acoma Co. has identified one of its cost pools to be...

Required information M4-8 and M4-9 Acoma Co. has identified one of its cost pools to be quality control and has assigned $292,400 to that pool. Number of Inspections has been chosen as the cost driver for this pool; Acoma performs 31,500 inspections annually. Suppose Acoma manufactures two products that consume 15,120 (Product 1) and 16,380 (Product 2) inspections each. M4-9 (Algo) Assigning Costs Using Activity Proportions (LO 4-5) Assume that Acoma manufacturers only the two products mentioned and they consume 100 percent of the company's quality inspections. Using activity proportions, determine how much quality control cost will be assigned to each of Acoma's product lines. Quality Control Costs Product 1 Product 2

## Answers

Quality control cost assigned to Product 1 =

Total quality control cost × Number of inspections of Product 1 / total number of inspections

= $292400 × 15120 inspections / 31500 inspections

= $140352

Quality control cost assigned to Product 2 =

Total quality control cost × Number of inspections of Product 2 / total number of inspections

= $292400 × 16380 inspections / 31500 inspections

= $152048

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