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Nichols Inc, manufactures remote controls. Currently the company uses a plant - wide rate for allocating manufacturing overhead. The plant manager is considering switching -
Nichols Inc, manufactures remote controls. Currently the company uses a plant - wide rate for allocating manufacturing overhead. The plant manager is considering switching - over to ABC costing system and has asked the accounting department to identify the primary production activities and their cost drivers which are as follows: Activities Cost driver Allocation Rate Material handling Number of parts $5 per part Assembly Labor hours $20 per hour Inspection Time at inspection station $10 per minute The current traditional cost method allocates overhead based on direct manufacturing labor hours using a rate of $20 per labor hour A. $630.00 per remote control B. $35.00 per remote control O C. $63.00 per remote control D. $2.00 per remote control Activities Cost driver Allocation Rate Material handling Number of parts $5 per part Assembly Labor hours $20 per hour Inspection Time at inspection station $10 per minute The current traditional cost method allocates overhead based on direct manufacturing labor hours using a rate of $20 per labor hour. What are the indirect manufacturing costs per remote control assuming an activity - based - costing method is used and a batch of 10 remote controls are produced? The batch requires 100 parts, 5 direct manufacturing labor hours, and 3 minutes of inspection time. O A. $630.00 per remote control B. $35.00 per remote control C. $63.00 per remote control OD. $2.00 per remote control ? Click to select your answer. ORE E @
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