Boswell Company Manufactures Two Products, Regular and Supreme Overhead Applied to Supreme Using Activity-Based Costing Is
A)$1,290,000

question 45

Multiple Choice

Boswell Company manufactures two products, Regular and Supreme. Boswell's overhead costs consist of machining, $3,000,000; and assembling, $1,500,000. Information on the two products is: $\begin{array}{lrr}&\text { Regular}&\text { Supreme }\text { Direct labor hours } & 10,000 & 15,000 \\\text { Machine hours } & 10,000 & 30,000 \\\text { Number of parts } & 90,000 & 160,000\end{array}$ Overhead applied to Supreme using activity-based costing is

• A)$1,290,000.
• B)$1,800,000.
• C)$2,700,000.
• D)$3,210,000.

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Definitions:

Moral Hazard

A situation in which one party is more likely to take risks because they know that another party bears the consequences or costs of those risks.

Insured Individuals

People covered by insurance policies, protecting them against financial losses from specified risks.

Less Care

A situation or behavior characterized by reduced attention or diligence towards something.

Moral Hazard

A situation in which one party is motivated to take undue risks because the consequences of those risks will be borne by another party.