Zimmerman Company Manufactures Two Products, Board 12 and Case 165

question 45

Multiple Choice

Zimmerman Company manufactures two products, Board 12 and Case 165.Zimmerman's overhead costs consist of setting up machines, $2,400,000; machining, $5,400,000; and inspecting, $1,800,000.Information on the two products is: $$\begin{array} { l r r } & \text { Board 12 } & \text { Case 165 } \\\text { Direct labor hours } & 15,000 & 25,000 \\\text { Machine setups } & 600 & 400 \\\text { Machine hours } & 24,000 & 26,000 \\\text { Inspections } & 800 & 700\end{array}$$ Overhead applied to Board 12 using traditional costing using direct labor hours is

• A)$3,600,000.
• B)$4,608,000.
• C)$5,010,000.
• D)$5,760,000.

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Definitions:

Merit Pay

A compensation strategy that rewards employees based on their performance and achievements, rather than on seniority or hours worked.

Disadvantages

The negative or less favorable aspects of a situation, decision, or condition.

Performance-Based Pay System

A compensation system where an employee's pay is based on their performance and achievements rather than a fixed salary.

Strategic Objectives

Goals set by an organization, designed to guide its long-term direction and ensure its growth, sustainability, and relevance in the market.