Question
A company produces numerous blends of coffee, two of which are known as the French Blend and the Italian Blend. The companys ABC system divides
A company produces numerous blends of coffee, two of which are known as the French Blend and the Italian Blend. The companys ABC system divides its total manufacturing overhead of $1,982,500 into four activity cost pools as shown below.
Activity | Activity Measure | Expected Activity | Estimated Cost | |
---|---|---|---|---|
Purchasing | Purchase orders | 1,500 | orders | $ 330,000 |
Materials handling | Number of setups | 1,800 | setups | $ 540,000 |
Quality control | Number of batches | 600 | batches | $ 210,000 |
Roasting | Roasting hours | 98,400 | hours | $ 902,500 |
Data regarding production of the French and Italian blends is as follows:
French Blend | Italian Blend | |||
---|---|---|---|---|
Expected sales | 100,000 | pounds | 5,000 | pounds |
Batch size | 20,000 | pounds | 1,250 | pounds |
Setups | 3 | per batch | 3 | per batch |
Purchase order size | 20,000 | pounds | 500 | pounds |
Roasting time per 100 pounds | 0.9 | hours | 0.5 | hours |
Assume the company uses a plantwide predetermined overhead rate based on roasting hours. The amount of manufacturing overhead assigned to the French Blend for its expected sales would be closest to:
Garrison 17e Rechecks 2021-10-23
Multiple Choice
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$2,460.
-
$2.46.
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$18,135.
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$18.14.
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