Barnett 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 Under Barnett's activity-based costing system, what is the per-unit overhead cost of Standard?
A. $228.
B. $164.
C. $282.
D. $272.
E. None of the answers is correct.
Answer: D
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If Ashley Company accounts for the investment as a minority, active investment and uses the equity method to account for the investment, Ashley will recognize what amount of 2010 income from the investment?
a. $4,000 b. $10,000 c. $25,000 d. $15,000
Tommy Thompson has a small mail order business. He wants to borrow $10,000 from his friend Ziggy Harris. Tommy says that he will give Ziggy the right to collect on accounts customers owe him. What is the arrangement called?
A) a chattel mortgage B) a debenture C) an assignment of accounts receivable D) a general security agreement E) a floating charge
Refer to the scenario above. Operations managers and process engineers design a line that contains seven stations. What is the percentage of idle time?
A) 21.9% B) 14.3% C) 25.6% D) 17.8%
Which of the following statements is CORRECT?
A. Under normal conditions, a firm's expected ROE would probably be higher if it financed with short-term rather than with long-term debt, but using short-term debt would probably increase the firm's risk. B. Conservative firms generally use no short-term debt and thus have zero current liabilities. C. A short-term loan can usually be obtained more quickly than a long-term loan, but the cost of short-term debt is normally higher than that of long-term debt. D. If a firm that can borrow from its bank at a 6% interest rate buys materials on terms of 2/10, net 30, and if it must pay by Day 30 or else be cut off, then we would expect to see zero accounts payable on its balance sheet. E. If one of your firm's customers is "stretching" its accounts payable, this may be a nuisance but it will not have an adverse financial impact on your firm if the customer periodically pays off its entire balance.