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:

Excellent Customer Service

High-quality support and service provided to customers, focusing on meeting their needs and ensuring their satisfaction.

Macro Strategy

High-level approaches and objectives focused on overall goals and financial performance of an organization or economy.

Operational Excellence

Involves a firm’s focus on efficient operations and excellent supply chain management.

Market Share

The percentage of an industry's sales that a particular company secures over a specific time period.