Question
COVID Co. uses a 5,000 square foot factory space that it rents for $2,500 a month for all its manufacturing activities. Production manager has decided
COVID Co. uses a 5,000 square foot factory space that it rents for $2,500 a month for all its manufacturing activities. Production manager has decided to switch to an activity-based costing system, and has identified its activities as follows: Preparation and Setup, Machining. Finishing, and Quality Control. 600 square feet of the factory are used for machining, while 2,000 square feet (each) are used for Preparation and Setup and Quality Control. Finishing uses 400 square feet. When assigning indirect costs to each activity, how much factory rent should be assigned to the Quality Control cost pool? Select one: a. $200 b. $1,000 c. $300 d. $2,000 e. None of the given ANSWER COVID Co. produces two different products (A and X) using two different activities: Machining, which uses machine hours as an activity driver, and Inspection, which uses number of batches as an activity driver. The cost of Machining is $500,000, while the cost of Inspection is $30,000. Product A uses 70% of total machine hours and 30% of total batches. What is the total activity cost assigned to product A? Select one: a. $125,000 b. None of the given ANSWER c. $171,000 d. $22,500 e. $359,000 Please use Table 1 to ANSWER this question. COVID Co. produces two different products (Product A and Product X) using two different activities: Machining, which uses machine hours as an activity driver, and Inspection, which uses number of batches as an activity driver. The activity rate for Machining is $125 per machine hour, and the activity rate for Inspection is $500 per batch. What is the amount of Inspection cost assigned to Product X? Select one: a. None of the given ANSWER b. $22,500 c. $7,500 d. $500,000 e. $375,000
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