1. Delauder Enterprises makes a variety of products that it sells to other businesses. The companys activity-based costing system has four activity cost pools for assigning costs to products and customers. Details concerning that activity-based costing system are listed below: Activity Cost Pool Activity Measure Activity Rate Supporting assembly Direct labor-hours (DLHs) $ 3.45 per DLH Processing batches Number of batches $ 193.30 per batch Processing orders Number of orders $ 83.05 per order Serving customers Number of customers $ 1,608.00 per customer The cost of serving customers, $1,608.00 per customer, is the cost of serving a customer for one year. Grennon Corporation buys only one of the companys products. The details of last years purchases of this product are listed below: Number of units purchased 1,500 units Number of batches 5 batches Number of orders 2 orders Direct labor-hour requirement 0.25 DLHs per unit Selling price $ 18.55 per unit Direct materials cost $ 8.35 per unit Direct labor cost $ 3.95 per unit According to the activity-based costing system, the total overhead cost for this customer this past year was closest to:

Group of answer choices $4,034.35 $2,426.35 $18,450.00 $22,484.35

2. Which of the following statements about using a plantwide overhead rate based on direct labor is right?

Group of answer choices

It is often overly simplistic and incorrect to assume that direct labor-hours is a companys only manufacturing overhead cost driver.

Using a plantwide overhead rate based on direct labor costs will ensure that direct labor costs will be correctly traced to jobs.

Using a plantwide overhead rate based on direct labor-hours will ensure that direct labor costs are correctly traced to jobs.

The labor theory of value ensures that using a plantwide overhead rate based on direct labor will do a reasonably good job of assigning overhead costs to jobs.

3. If a company does not have sufficient contribution margin to cover fixed expenses, which of the following is true?

Group of answer choices

the gross profit is less than the operating expenses.

a net loss will occur.

a net income will occur.

the total profit equals the total expenses.