Skyfire Manufacturing Has Two Departments, Assembly and Testing The Above Activities Are Used by the Two Departments as Given

question 8

Multiple Choice

Skyfire Manufacturing has two departments, Assembly and Testing. You are given the following information about the costs of 4 activities that occur at the manufacturing plant monthly: $\begin{array}{c}\begin{array}{lll}\underline{\text {Activity}}\\\text {Material handling}\\\text {Supervision on of direct labor}\\\text {Maintenance and cleaning}\\\text {Machining}\\\text {Total costs}\end{array}\begin{array}{c}\underline{\text { Total Costs }} \\\$ 100,000 \\105,000 \\150,000 \\\underline{240,000 }\\\underline{\underline{\$ 595,000}} \\\end{array}\begin{array}{c}\underline{\text { Volume of Cost Driver}}\\\text { 200,000 parts}\\\text { 70 employees}\\\text { 3,000 hours}\\\text { 6,000 machine hours}\\\\\end{array}\end{array}$


The above activities are used by the two departments as follows: $\begin{array}{lll}&\underline{\text {Assembly}}&\underline{\text {Testing}}\\\text { Material handling } & 150,000 \text { parts } & 50,000 \text { parts } \\\text { Supervision of direct labor } & 30 \text { employees } & 40 \text { employees } \\\text { Time spent cleaning } & 2,000 \text { hours } & 1,000 \text { hours } \\\text { Number of machine hours } & 4,000 \text { machine hours } & 2,000 \text { machine hours }\end{array}$
How much of the total overhead costs will be allocated to Testing?

• A) $595,000
• B) $215,000
• C) $380,000
• D) $240,000

---

Definitions:

Car Type SS

Refers to a specific classification or model of a vehicle, often implying a designation for performance or body style.

SSE

The sum of squared errors, a measure used in statistics to quantify the discrepancy between data points and a model's predictions.

ANOVA Table

A table used to display the output of an Analysis of Variance, which helps to identify significant differences between group means.

P-value

A statistical measure indicating the probability of obtaining the observed results, or more extreme, assuming the null hypothesis is true.