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.ActivityCostCost DriverMaterial handling$225,000 Number of partsMaterial insertion 2,475,000 Number of partsAutomated machinery 840,000 Machine hoursFinishing 170,000 Direct labor hoursPackaging 170,000 Orders shippedTotal$3,880,000 The following information pertains to the three product lines for next year: Economy Standard DeluxeUnits to be produced 10,000 5,000 2,000 Orders to be shipped 1,000 500 200 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:
A. $646,471.
B. $961,176.
C. $1,141,176.
D. $456,471.
E. None of the answers is correct.
Answer: C
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