For Its Inspecting Cost Pool, Ellsworth, Inc

question 28

Multiple Choice

For its inspecting cost pool, Ellsworth, Inc. expected overhead cost of $400,000 and 4,000 inspections. The actual overhead cost for that cost pool was $480,000 for 5,000 inspections. The activity-based overhead rate used to assign the costs of the inspecting cost pool to products is

• A) $80 per inspection.
• B) $96 per inspection.
• C) $100 per inspection.
• D) $120 per inspection.

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Definitions:

Current Liabilities

Financial obligations or debts of a business that are due to be paid within one year.

Net Change in Sales

The difference between the sales figures of a current period compared to a previous period, which can indicate growth or decline.

Comparative Income Statement

A financial statement that presents the revenues, expenses, and profits of a company over different periods to highlight changes over time.

Sales

The total amount of goods or services sold by a company, contributing to its revenue.