Q 17.33: Vroom Inc. and Zoom Inc. make competing models of moped. Manufacturing information for each model is given below: Total cost per Materials cost per Direct labor Maker unit $492.60 $504.80 unit $302.90 $330.40 hours per unit 3.2 3.0 Vroom Zoom Both Vroom and Zoom calculate their direct labor cost to be $18.60 per hour. Total per-unit costs for each moped consist of direct labor costs, materials costs and overhead costs. If both manufacturers allocate overhead on the basis of direct labor hours, then A) We cannot make any conclusions about either firm's predetermined overhead rate. Both firms have the same predetermined overhead rate. B C) Zoom has a higher predetermined overhead rate D) Vroom has a higher predetermined overhead rate. Q 17.33: Parent's Best manufactures multiple sizes and thicknesses of diapers. Because its product lines are similar, Parent's Best can produce any diaper size or style in its twelve factories with minimal setup time. In one of its factories, it has incurred machine electricity costs of $315,000, sales and customer support costs of $96,000, and factory rent and upkeep of $216,000. Parent's Best uses activity-based costing. Based on the amounts above, how much should they allocate to product cost for size 3 diapers? Assume that size 3 diapers account for 20% of production. A $106,200 $125,400 C $63,000 D $82,200 Q 17.33: Benson's Bikes manufactures bicycles for recreational, off-roading, and professional racing use. They also manufacture skateboards, wagons, and scooters. As the price and quality increases, Benson's sells fewer products and makes smaller batches. This indicates that A) they should use activity-based costing because they think they would benefit from introducing automation to the assembly line. B) they should not use activity-based costing because it would be too expensive with minimal benefit. C) they should not use activity-based costing because they have too many different products to analyze the costs effectively D they should use activity-based costing because the more accurate costing and pricing of products will increase their revenue. Q 17.33: Haywood Manufacturing produces wheel rims for car tires. They must produce different styles of rims for 26 different vehicle models. Of the following list of activities, which non-value-added activities could they potentially reduce? I. Receiving materials Il. Move and store materials III. Set up machines IV. Machining V. Move to finished inventory VI. Package and Ship 3 hours 24 hours 1.5 hours 18 hours 12 hours 2 hours A II, V B II, IV, V C) I, II, IV, V D I, I, II, V