McArthur Company Has Gathered the Following Data Related to Its

question 86

Multiple Choice

McArthur Company has gathered the following data related to its production process of two of its products for the week ended April 30:
$\begin{array}{lrrrr}\text { Model } & \text { Item \#B200 } & \text { Item \#C440 }\\\text { Quantity produced } & 60 & 100 \\\text { Unit-related material costs } & \$ 42,000 & \$ 100,000 \\\text { Variable conversion costs } & 72,000 & 300,000\\\text { Total direct costs } & \$ 114,000 & \$ 400,000 \\\text { Indirect costs: } & & & \\\text { Indirect manufacturing costs } & 163,200 & 272,000 \\\text { Indirect operating costs } & 255,000 & 425,000\\\text { Total indirect costs } & 418,200 & 697,000 \\\text { Total cost}& \$ 532,200 & \$ 1,097,000\end{array}$
The costs above that appear to be allocated rather than traced are:

• A) Unit-related material costs.
• B) Variable conversion costs.
• C) Indirect manufacturing costs only.
• D) All indirect costs.

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Definitions:

Sweaters

Garments intended to cover the upper body and arms, typically knitted from wool, cotton, or synthetic fibers.

Production Possibility Frontiers

A portrayal conveying the absolute production potential for two commodities, hinging on distinct inputs such as resources and supplementary factors.

International Trade

The exchange of goods and services across international borders or territories, influenced by comparative advantages, exchange rates, and international agreements.

Comparative Advantage

The ability of an individual or country to produce a good or service at a lower opportunity cost than another producer, supporting international trade.