Vector Company Manufactures a Number of Different Products

question 30

Multiple Choice

Vector Company manufactures a number of different products. In its traditional costing system, overhead costs are allocated based on a predetermined rate. The company recently switched to an activity-based costing system using different cost drivers for each of their two activities. Information is as follows: Job #16 required 22 labor hours and 3 designs. By how much would this job have been over or undercosted under the traditional costing system?

• A) Undercosted by $96
• B) Undercosted by $71.09
• C) Overcosted by $96
• D) Undercosted by $53.76

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Definitions:

Final Forecast

The last projection made about a variable of interest, such as sales or market trends, before actual data replaces estimates.

Indirect Forecast

Indirect forecast refers to a method of predicting future outcomes or trends based on related but not directly connected indicators, rather than directly observing the phenomenon being forecasted.

Sales Forecasting Techniques

Methods used to estimate the future sales of a product or service over a specific period, based on historical data, market analysis, and other factors.

Heuristic Prognostications

Forecasting or predictions made based on educated guesses or experiential rules rather than formal methods.