Question
The 195 Factory produces replacement parts and assemblies for vintage Cessna aircraft. The company is considering replacing its current costing system with an activity-based approach.
The 195 Factory produces replacement parts and assemblies for vintage Cessna aircraft. The company is considering replacing its current costing system with an activity-based approach. It has identified three activities: computer-aided design; fabrication; and assembly and finishing. Data regarding these activities has been collected in the table below.
| Activity | Activity Driver | Driver Consumption | Activity Cost Pool |
| Computer-aided design (CAD) | (CAD) hours | 2,000 | $1,000,000 |
| Fabricating | Machine hours | 2,000 | $600,000 |
| Assembly and finishing | Labor hours | 8,000 | $400,000 |
What is the activity cost rate for the computer-aided design activity?
| a. | $300 per machine hour | |
| b. | $250 per direct labor hour | |
| c. | $1,000 per computer hour | |
| d. | $500 per computer hour |
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Ethics And The Internal Auditors Political Dilemma Tools And Techniques To Evaluate A Companys Ethical Culture Internal Audit And IT Audit
Authors: Lynn Fountain
1st Edition
149876780X, 978-1498767804
