Department D Has Recently Purchased and Installed New Computerized Equipment

question 17

Multiple Choice

Department D has recently purchased and installed new computerized equipment for Product X.This equipment will increase the overhead costs by $2,700 and decrease labor costs (due to time savings) in Department D by $3.00 per case.Machine hours will not change.If Smelly uses departmental rates,what are the product costs per case for Product X assuming Departments C and D use direct labor hours and machine hours as their respective allocation bases?

• A)$80.00
• B)$74.00
• C)$69.50
• D)$79.50

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Definitions:

Shareholders

Individuals or entities that own shares in a corporation, giving them partial ownership and typically the right to vote on corporate matters.

Debt

Debt is an amount of money borrowed by one party from another, typically with the arrangement that it will be paid back, often with interest.

De Jure Corporation

A corporation that has fully complied with all legal requirements for incorporation and therefore enjoys all the powers and rights granted to corporations under the law.

De Facto Corporation

A company that operates as if it were legally incorporated, even though it has not completed the necessary legal formalities and documentation.