Adams Company makes two types of circuit boards. One is a high-caliber board designed to accomplish...
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Adams Company makes two types of circuit boards. One is a high-caliber board designed to accomplish the most demanding tasks; the other is a low-caliber board designed to provide limited service at an affordable price. During its most recent accounting period, Adams incurred $180,000 of inspection cost. Adams recently established an activity-based costing system that classifies its activities into four categories. Categories and appropriate cost drivers follow: Direct Labor Number of Batches Number of Number of Square Feet 25,000 Hours Inspectors High caliber Low caliber 4,000 11,000 20 4 20 95,000 Total 15,000 40 6 120,000 Required Allocate the inspection cost between the two products assuming that it is driven by (a) unit-level activities, (b) batch-level activities, (c) product-level activities, or (d) facility-level activities. Note that each allocation represents a separate alternative. In other words, the $180,000 of inspection cost will be allocated four times, once for each cost driver. (Do not round intermediate calculations.) Allocated Cost High-Caliber Low-Caliber Boards Boards (a) Unit-level activities (b) Batch-level activities (c) Product-level activities (d) Facility-level activities Adams Company makes two types of circuit boards. One is a high-caliber board designed to accomplish the most demanding tasks; the other is a low-caliber board designed to provide limited service at an affordable price. During its most recent accounting period, Adams incurred $180,000 of inspection cost. Adams recently established an activity-based costing system that classifies its activities into four categories. Categories and appropriate cost drivers follow: Direct Labor Number of Batches Number of Number of Square Feet 25,000 Hours Inspectors High caliber Low caliber 4,000 11,000 20 4 20 95,000 Total 15,000 40 6 120,000 Required Allocate the inspection cost between the two products assuming that it is driven by (a) unit-level activities, (b) batch-level activities, (c) product-level activities, or (d) facility-level activities. Note that each allocation represents a separate alternative. In other words, the $180,000 of inspection cost will be allocated four times, once for each cost driver. (Do not round intermediate calculations.) Allocated Cost High-Caliber Low-Caliber Boards Boards (a) Unit-level activities (b) Batch-level activities (c) Product-level activities (d) Facility-level activities
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Solution a Unit level activites Allocation on the basis of Direct Labou... View the full answer
Related Book For
Probability and Random Processes With Applications to Signal Processing and Communications
ISBN: 978-0123869814
2nd edition
Authors: Scott Miller, Donald Childers
Posted Date:
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