Noland Company Manufactures Two Models of Its Banjo, the Basic

question 143

Multiple Choice

Noland Company manufactures two models of its banjo, the Basic and the Luxury. The Basic model requires 10,000 direct labor hours and the Luxury requires 30,000 direct labor hours. The company produces 3,400 units of the Basic model and 600 units of the Luxury model each year. The company inspects one Basic for every 100 produced, and inspects one Luxury for every 10 produced. The company expects to incur $112,800 of total inspecting costs this year. How much of the inspecting costs should be allocated to the Basic model using ABC costing?

• A) $28,200
• B) $40,800
• C) $56,400
• D) $95,880

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Definitions:

Immanuel Kant

A German philosopher in the 18th century, known for his work in epistemology, ethics, and aesthetics, emphasizing duty, moral law, and the categorical imperative.

Rationalism

A philosophy that emphasizes reason as the primary source of knowledge over sensory experience.

Empiricism

The theory that all knowledge is derived from sense-experience and observation.

Randomly Occurring Patterns

Sequences or arrangements that appear without a specific order or plan, often perceived mistakenly as meaningful.