Figure 3-7
Granite, Inc The Following Are Two of the Jobs Completed During the and Cost

question 8

Multiple Choice

Figure 3-7
Granite, Inc., has identified the following overhead costs and cost drivers for next year: $$\begin{array} { l r l r } \text { Overhead Item } & \text { Expected Cost } & { \text { Cost Driver } } & \text { Expected Quantity } \\\text { Setup costs } & £ 100,000 & \text { Number of setups } & 500 \\\text { Ordering costs } & 40,000 & \text { Number of orders } & 3,200 \\\text { Maintenance } & 200,000 & \text { Machine hours } & 4,000 \\\text { Power } & 20,000 & \text { Kilowatt hours } & 80,000\end{array}$$ The following are two of the jobs completed during the year: $\begin{array}{lrr}&\text { Job } 500&\text { Job } 501\\\text { Direct materials } & £ 1,500 & £ 2,000 \\\text { Direct labour } & £ 1,400 & £ 2,400 \\\text { Units completed } & 100 & 160 \\\text { Direct labour hours } & 100 & 160 \\\text { Number of setups } & 2 & 8 \\\text { Number of orders } & 8 & 10 \\\text { Machine hours } & 40 & 50 \\\text { Kilowatt hours } & 60 & 100\end{array}$ The company's normal activity is 4,000 direct labour hours.
-Refer to Figure 3-7. If Granite, Inc., used activity-based cost drivers to allocate overhead costs, the total cost of Job 500 would be

• A)£5,715.
• B)£5,667.
• C)£5,415.
• D)£5,315.

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Definitions:

Sampling Method

The technique or process used to select a sample from a population for statistical analysis.

Stratified Sample

A stratified sample involves dividing a population into smaller groups, or strata, and randomly sampling from each stratum to ensure representation of all groups.

Random Selection

A method of selecting individuals or units in such a way that each member of the population has an equal chance of being selected.

Blocking Variable

A variable that is used to group experimental units in a way that reduces variation in the response variable.