Tidwell Industries Has the Following Overhead Costs and Cost Drivers

question 90

Multiple Choice

Tidwell Industries has the following overhead costs and cost drivers.Direct labor hours are estimated at 100,000 for the year. $\begin{array}{llrl}\text { Activitu Cost Pool }&\text { Cost Driver }&\text { Est Overhead }&\text { Cost Driver Activity }\\\hline\text { Ordering and Receiving } & \text { Orders } & \$ 120,000 & 500 \text { orders } \\\text { Machine Setup } & \text { Setups } & 297,000 & 450 \text { setups } \\\text { Machining } & \text { Machine hours } & 1,500,000 & 125,000 \mathrm{MH} \\\text { Assembly } & \text { Parts } & 1,200,000 & 1,000,000 \text { parts } \\\text { Inspection } & \text { Inspections } & 300,000 & 500 \text { inspections }\end{array}$ If overhead is applied using activity-based costing, the overhead application rate for ordering and receiving is

• A)$1.20 per direct labor hour.
• B)$240 per order.
• C)$0.12 per part.
• D)$6,834 per order.

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Definitions:

Joint Venture

A business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task.

Equity Alliance

A collaboration or partnership formed to promote fairness, access, and equal opportunities in various sectors, such as education, healthcare, and employment.

Co-Ownership Arrangement

A legal agreement or structure where two or more parties share ownership rights and responsibilities of a property or asset.

Franchising

A licensing agreement where a franchisor grants a franchisee the right to use its brand, products, and operational model in exchange for a fee.