Boswell Company Manufactures Two Products, Regular and Supreme Overhead Applied to Supreme Using Traditional Costing Using Direct Labor

question 148

Multiple Choice

Boswell Company manufactures two products, Regular and Supreme. Boswell's overhead costs consist of machining, $3,000,000; and assembling, $1,500,000. Information on the two products is: $$\begin{array} { l c c } & \text { Regular } & \text { Supreme } \\\text { Direct labor hours }& 10,000 & 15,000 \\\text { Machine hours } & 10,000 & 30,000 \\\text { Number of parts } & 90,000 & 160,000\end{array}$$ Overhead applied to Supreme using traditional costing using direct labor hours is

---

Definitions:

Life Cycle Costing (LCC)

An approach used to assess the total cost of ownership, considering all costs associated from acquisition through disposal of an asset.

Capital Acquisitions

The process of procuring assets or capital goods that contribute to an organization's productive capacity, often involving significant investment.

Purchase Price

The amount of money paid to acquire a good or service, not including any additional costs like delivery or installation.

Supply Cost Savings

Reductions in the amount spent on acquiring goods or services, enhancing overall profitability.