Flemming Corporation Uses Activity-Based Costing to Compute Product Margins

question 147

Multiple Choice

Flemming Corporation uses activity-based costing to compute product margins. Overhead costs have already been allocated to the company's three activity cost pools--Machining, Order Filling, and Other. The costs in those activity cost pools appear below: Machining costs are assigned to products using machine-hours (MHs) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Activity data appear below:
Finally, sales and direct cost data are combined with Machining and Order Filling costs to determine product margins.
What is the overhead cost assigned to Product U6 under activity-based costing?

• A) $36,500
• B) $20,064
• C) $33,804
• D) $13,740

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Definitions:

Average Wage

The mean earnings of workers in a specific job, industry, or region, often used to compare economic wellbeing.

Dispersed

Spread out or scattered, not concentrated in one area.

Data Distribution

The way in which data points are spread or dispersed across values in a dataset.

Skewness

A measure of the asymmetry of the probability distribution of a real-valued random variable; indicates how the tail on one side of the distribution compares to the tail on the other side.