Marion Manufacturing Uses an Activity-Based Costing System Setups Would Be Classified as a
A)unit-Level Activity

question 55

Multiple Choice

Marion Manufacturing uses an activity-based costing system. The company produces Model X and Model Y. Information relating to the two products is as follows: $$\begin{array}{l}\begin{array} { l r r } & \text { Model X } & \text { Model Y } \\\text { Units produced } & 20,000 & 40,000 \\\text { Machine hours } & 8,000 & 10,000 \\\text { Direct labor hours } & 14,000 & 16,000 \\\text { Engineering labor (hours) } & 1,000 & 1,400 \\\text { Setups } & 40 & 60\end{array}\\\text { The following costs are reported: }\\\begin{array} { l l } \text { Engineering } & \$ 48,000 \\\text { Setups } & 100,000 \\\text { Machine-related overhead } & 144,000\end{array}\end{array}$$ Setups would be classified as a

• A)unit-level activity.
• B)batch-level activity.
• C)product-level activity.
• D)facility-level activity.

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Definitions:

Short-term Obligations

Financial liabilities or debts that are due to be paid within a short period, typically within a year, such as accounts payable or short-term loans.

Structured Review

A systematic approach to evaluating a piece of work, such as a document or project, against predefined criteria.

Completed Project

A project that has been finished, fulfilling all its objectives and requirements within the predetermined scope, time, and budget.

Lessons Learned

Knowledge gained from experiences, often used as a way to continuously improve processes and practices.