Figure 3-4
Quint Manufacturing Uses an Activity-Based Costing System The Following Costs Are Reported

question 48

Multiple Choice

Figure 3-4
Quint Manufacturing uses an activity-based costing system. The company produces Model 1 and Model 2. Information relating to the two products is as follows: $$\begin{array} { l r r } \text { Units produced } & \text { Model 1 } & \text { Model } 2 \\\text { Machine hours } & 24,000 & 30,000 \\\text { Direct labour hours } & 7,500 & 8,500 \\\text { Material handling (number of moves) } & 8,000 & 12,000 \\\text { Setups } & 4,000 & 6,000 \\& 5,000 & 7,000\end{array}$$ The following costs are reported: $\begin{array}{lr}\text { Material handling } & £ 40,000 \\\text { Labour-related overhead } & 120,000 \\\text { Setups } & 60,000\end{array}$
-Refer to Figure 3-4. Setup costs assigned to Model 2 are

• A)£36,000.
• B)£35,000.
• C)£28,000.
• D)£25,000.

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Definitions:

Cash Sale

A cash sale occurs when a customer pays for goods or services immediately at the time of purchase, usually with cash, check, or electronic methods.

IFRS

International Financial Reporting Standards are a set of accounting standards developed by the International Accounting Standards Board (IASB) that are becoming the global standard for the preparation of public company financial statements.

Cash Flow Statement

A financial document that provides aggregate data regarding all cash inflows and outflows a company receives from its ongoing operations, investment activities, and financial investments.

Worksheet

An accounting tool used for planning and preparing financial statements, consisting of columns for trial balances, adjustments, adjusted trial balances, and sums.