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:

Recorded Income

The income that has been officially entered into the financial records of a company during a specific time period.

Acquisition Method

An accounting technique used during business combinations, where the acquirer records the assets acquired and liabilities assumed at their fair values at the acquisition date.

Goodwill

An intangible asset that arises when a business is acquired for more than the fair value of its net identifiable assets.

Consolidated Balance Sheet

A financial statement that aggregates the assets, liabilities, and equity of a parent company and its subsidiaries into one document.