Reference: 05-07
Alam Company Uses Activity-Based Costing to Compute Product

question 58

Multiple Choice

Reference: 05-07
Alam Company uses activity-based costing to compute product costs for external reports. The company has three activity cost pools and applies overhead using predetermined overhead rates for each activity cost pool. Overapplied or underapplied overhead is closed to the Cost of Goods Sold account at the end of each year. Estimated costs and activities for the current year are presented below for the three activity cost pools: $$\begin{array}{l}\begin{array} { | l | l | l | } \hline & \text { Estimated Overhead } \text { Cost } & \text { Expected Activity } \\\hline \text { Activity } 1 & \$ 29,328 & 1,200 \\\hline \text { Activity } 2 & \$ 30,024 & 2,400 \\\hline \text { Activity 3 } & \$ 65,142 & 2,200 \\\hline\end{array}\\\text { Actual costs and activities for the current year were as follows: }\\\begin{array} { | l | l | l | } \hline & \text { Actual Overhead Cost } & \text { Actual Activity } \\\hline \text { Activity } 1 & \$ 29,238 & 1,185 \\\hline \text { Activity } 2 & \$ 29,899 & 2,415 \\\hline \text { Activity } 3 & \$ 65,117 & 2,225 \\\hline\end{array}\end{array}$$
-The entry to the Cost of Goods Sold account at the end of the year was (round your final answer to nearest dollar value) :

• A)$1,173 debit.
• B)$801 debit.
• C)$1,173 credit.
• D)$801 credit.

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Definitions:

Suicide Prevention Centers

Organizations or facilities dedicated to providing support, education, and intervention strategies to reduce the incidence of suicide and assist those at risk.

Suicide Rate

The frequency at which individuals in a population take their own lives, usually measured per 100,000 people.

Western Societies

Societies located in the Western hemisphere, generally characterized by democratic principles, individualism, and a market-based economy.

Suicide Rates

are statistical measures of the number of suicides occurring within a given population, period, and jurisdiction, often expressed per 100,000 individuals.