Inspecting costs using abc costing

Reference no: EM13142878

Ban-Joe Company manufactures two models of its banjo, the Starter and the Star. The Starter model requires 10,000 direct labor hours and the Star requires 30,000 direct labor hours. The company produces 3,400 units of the Starter model and 600 units of the Star model each year. The company inspects one Starter for every 100 produced, and inspects one Star for every 10 produced. The company expects to incur $56,400 of total inspecting costs this year. How much of the inspecting costs should be allocated to the Starter model using ABC costing?

Reference no: EM13142878

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