1. RevampScamp purchased a Model A wheel grinder for $515 five years ago. Unfortunately, the wheel grinder stopped working. This wheel grinder could be replaced by a new Model B grinder costing $700 or a Model C grinder costing $575. RevampScamp decided to go with the Model C grinder. What is the total sunk cost regarding the decision to buy the Model C grinder rather than the Model B grinder?

a. $125

b. $515

c. $575

d. $700

2. RevampScamp uses a job-order costing system. It has two manufacturing departments Fabrication and Assembly. RevampScamp started, completed, and sold only two trailers during January. The following information is available for January 2018:

Assume RevampScamp uses a plantwide predetermined overhead rate with labor-hours as the allocation base. What was the plantwide predetermined overhead rate?

a. $182.50 per Labor-Hour

b. $198.08 per Labor-Hour

c. $205.71 per Labor-Hour

d. $185.71 per Labor-Hour

20 Assembly 50 15 $7,000 30 Fabrication Estimated Total Labor-Hours Used Estimated Total Machine-Hours Used Estimated Total Fixed Manufacturing Overhead $6,000 Estimated Variable Manufacturing Overhead Per $20 per Labor-Hour Labor-Hour Estimated Variable Manufacturing Overhead Per $15 per Machine-Hour Machine-Hour Job A Direct Materials $22,500 Direct Labor Cost $2,500 Actual Labor-Hours Used Fabrication 9 Assembly 23 Machine-Hours Used Fabrication 13 Assembly 6 Job B $24,500 $4,000 13 28 18