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Yellowstone Company produces kayaks and has recently adopted activity-based costing. Information on the following topics was gathered concerning the purchasing department: writing purchase orders for
Yellowstone Company produces kayaks and has recently adopted activity-based costing. Information on the following topics was gathered concerning the purchasing department: writing purchase orders for plywood, ordering key parts, number of plywood purchase orders written, number of key parts orders placed. Total overhead costs in purchasing are $600,000 of which $120,000 is devoted to ordering key parts. There were 20,000 key parts orders placed. The overhead application rate for ordering key parts is Select one: a. $6 b. $30 c. Neither A nor B A company has determined that the standard for labor is 2 hours per unit at $10 per hour. If a process produces 1000 units and uses 2.3 hours at $9 per hour, the labor rate variance is Select one: a. $2100 favorable b. $2100 unfavorable c. $3000 unfavorable d. None of the above
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