A.

A basic assumption of activity-based costing (ABC) is that:

All manufacturing costs vary directly with units of production. Products or services require the performance of activities, and activities consume resources. Only costs that respond to unit-level drivers are product costs. Only variable costs are included in activity-cost pools

B.

In a traditional job order cost system, the issue of indirect materials to a production department increases:

stores. work in process. factory overhead. factory overhead applied.

C.

Cost drivers are NOT:

All of the above are not cost drivers. Accounting measurements are used to evaluate whether or not performance is proceeding according to plan. A mechanical basis, such as machine hours, computer time, size of equipment, or square footage of factory, is used to assign to activities. Costs linked to two or more other costs.

D.

Clay Co. has considerable excess manufacturing capacity. A special job order's cost sheet includes the following applied manufacturing overhead costs: Fixed costs: 21,000 Variable costs: 33,000 The fixed costs include a normal $3,700 allocation for in-house design costs, although no in-house design will be done. Instead, the job will require the use of external designers costing $7,750. What is the total amount to be included in the calculation to determine the minimum acceptable price for the job?

$36,700 $40,750 $54,000 $58,050