(Management Accounting) Stanley Company has identified the following activities related to indirect production costs: Activity Activity Costs Cost Drivers Machine Setup $180,000 1,500 setup hours...

(Management Accounting)

Stanley Company has identified the following activities related to indirect production costs:

Activity                             Activity Costs       Cost Drivers

Machine Setup                  $180,000               1,500 setup hours

Materials Handling            $50,000                 12,500 pounds of materials

Electric Power                   $20,000                 20,000 kilowatt hours

Stanley Company has obtained the following data concerning two products:

                                                  Product 1          Product 2

Number of units produced       4,000                 20,000

Direct materials cost                $20,000             $25,000

Direct labor cost                       $12,000             $20,000

Number of setup hours             100                    120

Pounds of materials used         500                    1,500

Kilowatt-hours                         1,000                 2,000

Using an activity-based costing system, what amount of materials handling cost is assigned to Products 1 and 2?

     Product 1         Product 2

1. A) $2,000      $6,000


2. B) $8,333      $41,667


3. C) $12,500    $37,500


4. D) $20,000    $30,000