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A toy manufacturer makes its bestselling doll in a production line that includes two sequential stages: assembly and finishing. You have been given the following
A toy manufacturer makes its bestselling doll in a production line that includes two sequential stages: assembly and finishing. You have been given the following information relative to January (assume company uses weighted averagel: The total cost accumulated in the Assembly department during January was: a. 351,760 b. 479,600 c. 409,360 d. 379,600 A small manufacturing company that makes two products (C and D), currently uses Absorption costing for allocating their overheads. It is now planning a major expansion and its management is worried about making sure their pricing policy is accurate, so are considering implementing Activity-Base Costing (ABC). They have used an expert to advise them on the business cost drivers and identified the following three key activities and respective cost drivers: Customer activities - cost driver: number of customer orders Equipment activities - cost driver: number of machine set-ups Purchasing activities - cost driver: number of purchase orders The following data was collected for 2017: In the current absorption costing method, overheads are allocated on the basis of machine hours. In reviewing the overheads ahead of the trial to implement ABC, overheads were allocated to the three cost pools as follows: Customer activities - 50% Equipment activities - 20\% Purchasing activities - 30% Under ABC, the amount of overhead allocated to customer activities will be (in s ): a: 50,000 b. 75,000 c. 250,000 d. 125,000
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