Wallace Computer Company Produces Three Products: Earth, Wind, and Fire

question 89

Short Answer

Wallace Computer Company produces three products: Earth, Wind, and Fire.Earth requires 80 machine setups, Wind requires 60 setups, and Fire requires 180 setups.Wallace has identified an activity cost pool with allocated overhead of $720,000 for which the cost driver is machine setups.How much overhead is assigned to each product? $\begin{array}{llll}&\text { Earth}&\text {Wind }&\text {Fire }\\\text { a. } & \$ 240,000 & \$ 240,000 & \$ 240,000 \\\text { b. } & \$ 150,000 & \$ 112,500 & \$ 337,500 \\\text { c. } & \$ 180,000 & \$ 135,000 & \$ 405,000 \\\text { d. } & \$ 135,000 & \$ 240,000 & \$ 345,000\end{array}$

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Definitions:

Nature

The phenomena of the physical world collectively, including plants, animals, the landscape, and other features and products of the earth.

Nurture

The influence of external factors after conception, e.g., the product of exposure, experience, and learning on an individual.

Instinct

An ingrained behavior observed in animals that consistently occurs in reaction to designated stimuli.

Drive-Reduction Theory

A psychological theory suggesting that motivation arises from biological needs driving an individual to act in ways that reduce drives and achieve homeostasis.