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Rather Bedding Makes Two Types of Pillow-Down and Foam Using ABC, What Is the Cost Per Machine Hour in Is

question 134

Multiple Choice

Rather Bedding makes two types of pillow-down and foam. It is currently implementing an activity-based costing system. In the past, all overhead had been applied on the basis of machine hours. The company produces 6,000 down pillows and 18,000 foam pillows per year.
$\begin{array}{|l|c|c|c|c|}\hline\text { Cost Pool } & \begin{array}{c}\text { Driver and } \\\text { Level }\end{array} & \begin{array}{c}\text { Estimated } \\\text { Costs }\end{array} & \begin{array}{c}\text { Use of Driver by } \\\text { Down Pillows }\end{array} & \begin{array}{c}\text { Use of Driver by } \\\text { Foam Pillows }\end{array} \\\hline \text { Equiument setup } & 360 \text { setups } & \$ 216,000 & 120 \text { setups } & 240 \text { setups } \\\hline \text { Materials ordering } & 6,000 \text { orders } & \$ 60,000 & 2,400 \text { orders } & 3,600 \text { orders } \\\hline \text { Quality control }&2,000\text { inspections }&\$ 36,000 & 800 \text { inspections } & 1,200 \text { inspections }\\\hline \text { Machining }&\text { 8,000 machine hours }&\$86,000&\text { 4,200 machine hours }&\text { 3,800 machine hours }\\\hline\end{array}$
Using ABC, what is the cost per machine hour in the machining pool?

Definitions:

Operant Conditioning

A method of learning that occurs through rewards and punishments for behavior, encouraging the subject to associate behaviors with their consequences.

Classical Conditioning

A learning process that occurs through associations between an environmental stimulus and a naturally occurring stimulus.

Little Albert

An experiment conducted by John B. Watson and Rosalie Rayner which demonstrated classical conditioning in humans, specifically showing how fear can be conditioned.

John B. Watson

An American psychologist who established the psychological school of behaviorism.