Hammock Company Manufactures Two Models of Its Hammock, the Superior

question 35

Multiple Choice

Hammock Company manufactures two models of its hammock, the Superior and the Deluxe.The Superior model requires 10,000 direct labour hours and the Deluxe requires 40,000 direct labour hours.The company produces 4,000 units of the Superior model and 1,000 units of the Deluxe model each year.The company produces the Superior model in batch sizes of 200, while it produces the Deluxe model in batch sizes of 100.The company expects to incur $120,000 of total setup costs this year.How much of the setup costs are allocated to the Superior model using ABC costing?

• A)$80,000
• B)$60,000
• C)$24,000
• D)$100,000

---

Definitions:

Thyroxine

A hormone produced by the thyroid gland that regulates metabolism, energy generation, and growth and development.

FSH and LH

Follicle-Stimulating Hormone (FSH) and Luteinizing Hormone (LH) are gonadotropins secreted by the pituitary gland, involved in the regulation of reproductive processes including the menstrual cycle and spermatogenesis.

Norepinephrine

Neurotransmitter of the postganglionic fibers in the sympathetic division of the autonomic system; also, a hormone produced by the adrenal medulla. Sometimes referred to as noradrenaline.

Nuclear Envelope Pores

Structures in the nuclear envelope that allow the transport of molecules between the nucleus and the cytoplasm.