PaperPro Produces Two Models of Staplers-Executive and Basic Which of the Following Is Closest to the Overhead Rate

question 34

Multiple Choice

PaperPro produces two models of staplers-Executive and Basic.The annual production and sales of Executive and Basic are 800 and 500 units, respectively.The company has traditionally used direct labor hours to apply manufacturing overhead.Executive requires 0.3 labor hours per unit and Basic requires 0.2 labor hours per unit.The company has decided to utilize activity-based costing with three cost pools.Estimated costs for each pool are as follows: $\begin{array}{lrrrr}&\text { Estimated }\\\text { Activity } & \text { Overhead } & \text { Expected }&\text { Activity } \\\text { Cost Pool } & \text { Costs } & \text { Executive }&\text { Basic }&\text { Total }\\\hline\text { Assembly } & \$ 24,025 & 450 & 420 & 870 \\\text { Packaging } & 16,880 & 2,000 & 750 & 2,750 \\\text { General Factory } & 32,014 & 120 & 150 & 270 \\\quad \text { Total } & \$ 72,919 & & &\end{array}$ Which of the following is closest to the overhead rate for assembly using activity-based costing?

• A)$81.81
• B)$53.39
• C)$57.20
• D)$27.61

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Definitions:

Self-dealing

Conduct by a fiduciary or a person in a position of trust that involves taking advantage of their position for personal gain at the expense of those to whom they owe a duty.

Agent

An individual or entity authorized to act on behalf of another person or entity, known as the principal, in transactions or legal matters.

Fiduciary Duty

The legal obligation of one party to act in the best interest of another party, such as the responsibility of a trustee to safeguard the interests of the beneficiaries.

Compensation

Payment or rewards provided in exchange for services or to cover losses or damages.