Sofa Company Manufactures Two Models of Its Couch, the Mini

question 90

Multiple Choice

Sofa 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 $240,000 of total setup costs this year.How much of the setup costs are allocated to the Mini model using ABC costing?

• A)$160,000
• B)$120,000
• C)$48,000
• D)$200,000

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Definitions:

Fascia

A band or sheet of connective tissue, primarily collagen, beneath the skin that attaches, stabilizes, encloses, and separates muscles and other internal organs.

Fibromyalgia

A condition that exhibits chronic pain primarily in joints, muscles, and tendons.

Anti-Inflammatory

Refers to substances or treatments that reduce inflammation or swelling in the body.

Caffeine

A central nervous system stimulant commonly found in coffee, tea, chocolate, and certain medications, known for its ability to prevent drowsiness.