Reference: 05-11
Andruschack Corporation Uses Activity-Based Costing to Determine Product

question 28

Multiple Choice

Reference: 05-11
Andruschack Corporation uses activity-based costing to determine product costs for external financial reports. Overapplied or underapplied overhead is closed to the Cost of Goods Sold account at the end of each year. The
company has provided the following data concerning its activity-based costing system: $$\begin{array}{l}\begin{array} { | l | l | } \hline \begin{array} { l } \text { Activity Cost Pools (and Activity } \\\text { Measures) }\end{array} & \text { Estimated Overhead Cost } \\\hline \text { Machine related (machine-hours) } & \$ 213,000 \\\hline \text { Batch setup (setups) } & \$ 339,000 \\\hline \text { General factory (direct labour-hours) } & \$ 193,200 \\\hline\end{array}\\\\\begin{array} { | l | l | l | l | } \hline & & { \text { Expected Activity } } \\\hline \text { Activity Cost Pools } & \text { Total } & \text { Product } X & \text { Product } Y \\\hline \text { Machine related } & 10,000 & 3,000 & 7,000 \\\hline \text { Batch setup } & 10,000 & 4,000 & 6,000 \\\hline \text { General factory } & 14,000 & 7,000 & 7,000 \\\hline\end{array}\end{array}$$
-The activity rate for the batch setup activity cost pool is closest to:

• A)$84.80.
• B)$56.50.
• C)$74.50.
• D)$33.90.

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Definitions:

Pharmacodynamic

The branch of pharmacology concerned with the effects of drugs and the mechanism of their action in the body.

Capsules

Small, typically cylindrical, dosage forms designed to encapsulate medicines for oral administration, aiding in ease of consumption and absorption.

Cylinder-Shaped

Describes an object or structure with a circular base and parallel sides, extending equally in height.

Gelatin-Coated

Describes items that have a layer of gelatin applied to them, often used for ease of swallowing pills and capsules.