Reference: 05-12
Brenot Corporation Uses Activity-Based Costing to Determine Product

question 66

Multiple Choice

Reference: 05-12
Brenot Corporation uses activity-based costing to determine product costs for external financial reports. Activity rates computed at the beginning of the year are used to apply manufacturing overhead costs to products. The company has provided the following data concerning its activity-based costing system.
The data used to develop activity rates were: $$\begin{array} { | l | l | l | l | } \hline \text { Activity Cost Pools } & \begin{array} { l } \text { Estimated } \\\text { Overhead Cost }\end{array} & { \text { Expected Activity } } \\\hline \text { Machine related (machine-hours) } & \$ 379,600 & 13,000 & \text { MHs } \\\hline \text { Batch setup (setups) } & \$ 1,144,800 & 27,000 & \text { setups } \\\hline \text { General factory (direct labour-hours) } & \$ 420,500 & 29,000 & \text { DLHs } \\\hline \text { The actual activity for the year was: } & & & \\\hline & & \text { Actual Activity for the Year } \\\hline \text { Activity Cost Pools } & \text { Total } & \text { Product X } & \text { Product } Y \\\hline \text { Machine related (machine-hours) } & 13,000 & 11,000 & 2,000 \\\hline \text { Batch setup (setups) } & 26,000 & 3,000 & 23,000 \\\hline \text { General factory (direct labour-hours) } & 30,000 & 24,000 & 6,000 \\\hline\end{array}$$ The actual total manufacturing overhead cost incurred for the year was $1,942,300.
-The debits to the Manufacturing Overhead control account during the year (prior to closing out the balance) would have totalled:

• A)$1,932,200.
• B)$1,917,000.
• C)$1,942,300.
• D)$1,929,650.

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Definitions:

Motorcycle

A two-wheeled vehicle powered by an engine, known for its speed, maneuverability, and the sense of freedom it provides to riders.

Riding

The act of being carried or transported on the back of an animal, especially horses, or on vehicles like bicycles and motorcycles.

Apostrophes

Punctuation marks used to indicate possession or the omission of letters.

Crossing

The act of moving across something, such as a street or river, or a place where paths intersect or overlap.