Mountainburg Industries Has Developed Two New Products but Has Only

question 53

Multiple Choice

Mountainburg Industries has developed two new products but has only enough plant capacity to introduce one product during the current year. The following data will assist management in deciding which product should be selected. $\begin{array}{lrrrr}&\text { Product L } &\text { Product W}\\\text { Direct materials } & \$ 44 & \$ 36 \\\text { Machining labor (\$12hour) } &18 & 15 \\\text { Assembly labor (\$10/hour) } & 30 & 10 \\\text { Variable overhead (\$8/hour) } & 36 & 18 \\\text { Fixed overhead (4/hour) } & 18 & 9\\ \text { Total Manufacturing Cost } &\$ 146 &\$ 88 \\ \text { Estimated selling } \mathrm{p} & \$170 &\$100 \\\text { Actual research and development costs } & \$ 240,000 & \$ 175,000 \\ \text { Estimated advertising costs } & \$ 500,000 & \$ 350,000 \\\end{array}$ Mountainburg's fixed overhead includes rent and utilities, equipment depreciation, and supervisory salaries. Selling and administrative expenses are not allocated to individual products.
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For Mountainburg's Product L, the costs for direct materials, machining labor, and assembly labor represent

• A) Conversion costs.
• B) Period costs.
• C) Prime costs.
• D) Common costs.

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Definitions:

Immediate Interactions

Direct and instant communication or engagement between individuals or entities.

Written, Printed

Material that is expressed in letters, characters, or symbols on a surface such as paper to communicate ideas or information.

Media Distribution

The process of delivering content, such as news, music, movies, or software, through various channels like broadcasting, physical media, or the internet.

Channel And Medium

The means or method through which communication is conveyed from sender to receiver, such as digital, print, or verbal.