Question
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
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 $500 per machine hour, and the activity rate for Inspection is $125 per batch. What is the amount of Inspection cost assigned to Product X? Select one: a. $1,500,000 b. $375,000 c. $5,625 d. $1,875 e. None of the given ANSWER Volume-based cost systems tend to: Select one: a. none of the given answer b. over-cost low-volume products and over-cost high-volume products. c. under-cost low-volume products and under-cost high-volume products. d. over-cost low-volume products and under-cost high-volume products. e. under-cost low-volume products and over-cost high-volume products. 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 30% of total machine hours and 70% of total batches. What is the total activity cost assigned to product X? Select one: a. $171,000 b. $125,000 c. None of the given ANSWER d. $359,000 e. $22,500 When switching from a traditional costing system to an activity-based costing system that contains some batch-level costs: Select one: a. None of the given answer b. the unit product costs of high volume products typically decrease and the unit product costs of low volume products typically increase. c. the unit product costs of both high and low volume products typically decrease. d. the unit product costs of both high and low volume products typically increase. e. the unit product costs of high volume products typically increase and the unit product costs of low volume products typically decrease
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