Foxx Company Incurs $480,000 Overhead Costs Each Year in Its

question 43

Multiple Choice

Foxx Company incurs $480,000 overhead costs each year in its three main departments, setup ($30,000) , machining ($330,000) , and packing ($120,000) . The setup department performs 40 setups per year, the machining department works 5,000 hours per year, and the packing department packs 500 orders per year. Information about Foxx's two products is as follows: $$\begin{array} { l c c } & \text { Product A1 } & \text { Product B1 } \\\text { Number of setups } & 20 & 20 \\\text { Machining hours } & 1,000 & 4,000 \\\text { Orders packed } & 150 & 350 \\\text { Number of products manufactured } & 600 & 400\end{array}$$ If machining hours are used as a base under traditional costing, how much overhead is assigned to Product A1 each year?

• A)$96,000
• B)$240,000
• C)$165,000
• D)$144,000

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Definitions:

Study Time

The amount of time allocated towards learning or acquiring knowledge on a particular subject or group of subjects.

Learning Process

The ongoing process of acquiring new understanding, knowledge, behaviors, skills, values, or preferences, often facilitated through various methods of education or experience.

Minimum Efficient Scale

The smallest level of production at which long-term average costs are minimized, enabling businesses to achieve the best possible economies of scale.

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The total amount of goods and services consumed within a country's borders.