74. Wilder Company manufactures two models of its banjo, the Basic and the Luxury. The Basic model requires 10,000 direct labor hours and the Luxury requires 30,000 direct labor hours. The company produces 3,400 units of the Basic model and 600 units of the Luxury model each year. The company inspects one Basic for every 100 produced, and inspects one Luxury for every 10 produced. The company expects to incur $84,600 of total inspecting costs this year. How much of the inspecting costs should be allocated to the Basic model using ABC costing? a. $21,150 b. $30,600 C. $42,300 d. $71,910 ins: b, LO: 4, Bloom: AP, Difficulty: Hard, Min: 4 AACSB: Analytic, AICPA BB. Strategic/Critical Thinking, AICPA FN: Measurement, AICPA PC. Proble 1 - 212 Managerial Accounting 72. Teller, Inc. produces 3 products: P1, Q2, and R3. P1 requires 400 purchase orders, Q2 requires 600 purchase orders, and R3 requires 1,000 purchase orders. Teller has identified an ordeling and receiving activity cost pool with allocated overhead of $180,000 for which the cost driver is purchase orders. Direct labor hours used on each product are 50,000 for P1, 40,000 for Q2, and 110,000 for R3. How much ordering and receiving overhead is assigned to each product? P1 02 _R3 a. $60,000 $60,000 $60,000 b. $45,000 $36,000 $99,000 C. $36,000 $54,000 $90,000 d. $40,500 $45,000 $94,500 Ans: CLO 4, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Strategic/Critical Thinking, AICPA FN: Measurement, AICPA PC Problem Solving, IMA Cost Mout 74. Wilder Company manufactures two models of its banjo, the Basic and the Luxury. The Basic model requires 10,000 direct labor hours and the Luxury requires 30,000 direct labor hours. The company produces 3,400 units of the Basic model and 600 units of the Luxury model each year. The company inspects one Basic for every 100 produced, and inspects one Luxury for every 10 produced. The company expects to incur $84,600 of total inspecting costs this year. How much of the inspecting costs should be allocated to the Basic model using ABC costing? a. $21,150 b. $30,600 C. $42,300 d. $71,910 ins: b, LO: 4, Bloom: AP, Difficulty: Hard, Min: 4 AACSB: Analytic, AICPA BB. Strategic/Critical Thinking, AICPA FN: Measurement, AICPA PC. Proble