The Manoli Company Has Collected the Following Data for Use $\text { Activity Data: (expected and actual) }$

question 85

Multiple Choice

The Manoli Company has collected the following data for use in calculating product costs: $\text { Activity Data: (expected and actual) }$
$\begin{array}{|l|l|l|l|}\hline & \text { Rug Cleaners } & {\text { Sweepers }} &{\text { T otal }} \\\hline \text { Units Froduced } & 50,000 & 250,000 & 300,000 \\\hline \text { Prime Costs } & \$ 200,000 & \$ 750,000 & \$ 950,000 \\\hline \text { Direct Labor Hours } & 10,000 & 40,000 & 50,000 \\\hline \text { Machine Hours } & 20,000 & 10,000 & 30,000 \\\hline \text { Number of Setups } & 25 & 75 & 100 \\\hline \text { Inspection Hours } & 1200 & 2,800 & 4,000 \\\hline \text { Number of Moves } & 140 & 210 & 350 \\\hline\end{array}$
$\text { Departmental Data: (expected and actual) }$
$\begin{array}{|l|l|l|l|} \hline&{\text { Molding }} & \text { Assembly } & \text { T otal } \\\hline \text { Direct Labor Hours } & & & \\\hline \text { Rug Cleaners } & 5,000 & 5,000 & 10,000\\\hline\text { Sweepers }\\\hline\text { Total } & 10,000 & 40,000 & 50,000 \\\hline \text { Machine Hours } & & & \\\hline \text { Rug Cleaners } & 17,000 & 3,000 & 20,000 \\\hline \text { Sweepers } & 3,000 & 7,000 & 10,000 \\\hline \text { Total } & 20,000 & 10,000 & 30,000 \\\hline \text { Overhead Costs } & & & \\\hline \text { Machining } & 120,000 & \$ 30,000 & 150,000 \\\hline \text { Mowing Materials } & 40,000 & 30,000 & 70,000 \\\hline \text { Setting Up } & 70,000 & 10,000 & 80,000 \\\hline \text { Inspecting Products } & 20,000 & 30,000 & \$ 0,000 \\\hline \text { Total } & \$ 250,000 & \$ 100,000 & \$ 350,000 \\\hline\end{array}$ Manoli Company uses departmental overhead rates: Molding uses machine hours and Assembly uses labor hours. What is the unit product cost for sweepers if departmental overhead rates are used?

• A)$3.50
• B)$8.50
• C)$3.00
• D)$1.40

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Definitions:

Output Level

The total product units produced within a given time frame in a production process or economic system.

Origin

The point or place where something begins, arises, or is derived.

Isoquants

Isoquants are curves that represent combinations of different inputs that yield the same level of output, used in production theory to analyze input choices.

Marginal Rate

The rate of change in a variable (often cost or benefit) as a result of a unit increase in another variable, commonly used in the context of marginal tax rates or marginal cost.