Figure 11-1
Ubben Manufacturing Uses an Activity-Based Costing System The Following Costs Are Reported

question 17

Multiple Choice

Figure 11-1
Ubben Manufacturing uses an activity-based costing system. The company produces Model X and Model Y. Information relating to the two products is as follows: $\begin{array}{lll}&\text { Model X } & \text { Model Y } \\\text { Units produced } & 20,000 & 40,000 \\\text { Machine hours } & 8,000 & 10,000 \\\text { Direct labour hours } & 14,000 & 16,000 \\\text { Engineering labour (hours) } & 1,000 & 1,400 \\\text { Setups } & 40 & 60\end{array}$ The following costs are reported: $\begin{array}{ll}\text { Engineering } & £ 48,000 \\\text { Setups } & 100,000 \\\text { Machine-rel ated overhead } & 144,000\end{array}$
-Refer to Figure 11-1. Machine-related overhead would be classified as a

• A)unit-level activity.
• B)batch-level activity.
• C)product-level activity.
• D)facility-level activity.

Understand the components that contribute to the cost of goods sold (COGS) in a business.

Comprehend the fundamentals of pricing strategies within a business context.

Understand the impact of study habits on academic performance.

Develop skills in creating and interpreting bar charts for data comparison.

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Definitions:

Internal Rate

Often refers to the internal rate of return (IRR), a metric used to evaluate the profitability of potential investments.

Investment Project

A project or activity requiring capital expenditure with the expectation of generating financial returns over time.

Discount Factor

A multiplier used in discounting to calculate the present value of future cash flows or earnings.

Working Capital

The difference between a company's current assets and current liabilities, indicating the liquidity and short-term financial health of the business.