Fox Hunting Gear Manufactures Two Products: Camouflage Jackets and Camouflage

question 60

Multiple Choice

Fox Hunting Gear manufactures two products: camouflage jackets and camouflage hats. The company makes 50,000 jackets and 20,000 hats each year. Information for overhead costs and for the two products appears below.
$\begin{array}{|l|c|c|c|c|}\hline &&\text { Estimated }\\&&\text { Total }\\ \text { Activity }&\text { Driver }&\text { Overhead Cost }&\text { Jackets }&\text { Hats }\\\hline \text { Setups } & \text { \# of setups } & \$ 200,000 & 500 \text { setups } & 1,500 \text { setups } \\\hline \text { Ordering parts } & \text { \# of parts } & 300,000 & 60,000 \text { parts } & 40,000 \text { parts } \\\hline \text { Machining } & \text { \# of machine hours } & 600,000 & 12,000 \text { machine hrs. } & 6,000 \text { machine hrs. } \\\hline \text { Inspections } & \text { \# of inspections } & 400,000 & 10,000 \text { inspections } & 40,000 \text { inspections } \\\hline \text { Shipping } & \text { \# of shipments } & 300,000 & 10,000 \text { shipments } & 10,000 \text { shipments } \\\hline \text { Total overhead }&&\$1,800,000\\\hline\end{array}$
How much is the overhead cost of each hat if all overhead is assigned using ABC?

• A) $159.33 per hat
• B) $24.00 per hat
• C) $100.00 per hat
• D) $47.00 per hat

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Definitions:

Implied Ratification

The act of accepting or endorsing a previously unauthorized action or agreement through behavior that implies approval, rather than through explicit consent.

Agent's Act

Refers to actions taken by an agent on behalf of a principal, where the agent has the authority to affect the principal's legal position.

Principal's Conduct

Actions or behaviors of a principal (party who has authorized an agent to act on their behalf) that can affect the principal's legal rights and liabilities.

Express Ratification

The explicit approval or confirmation of an act or contract by all parties involved, often necessary for the act's validity.