Hale Company Manufactures Two Models of Its Couch, the Mini

question 125

Multiple Choice

Hale Company manufactures two models of its couch, the Mini and the Maxi. The Mini model requires 10,000 direct labor hours and the Maxi model requires 40,000 direct labor hours. The company produces 4,000 units of the Mini model and 1,000 units of the Maxi model each year. The company produces the Mini model in batch sizes of 200, while it produces the Maxi model in batch sizes of 100. The company expects to incur $360,000 of total setup costs this year. How much of the setup costs are allocated to the Mini model using ABC costing?

• A) $240,000
• B) $180,000
• C) $72,000
• D) $300,000

---

Definitions:

Taste Buds

Small sensory organs on the tongue and other parts of the mouth that are responsible for detecting the five basic tastes: sweet, sour, bitter, salty, and umami.

Difficulty Eating

Trouble or discomfort experienced while attempting to consume food, which can result from various medical or psychological conditions.

Stroke

A medical condition caused by a disturbance in blood supply to the brain, leading to brain damage and loss of function.

Special Devices

Equipment or apparatus designed to perform or assist in specific tasks, often for individuals with disabilities or special needs.