Figure 11-6
Peach, SA The Following Are Two of the Jobs Completed During the and Cost

question 18

Multiple Choice

Figure 11-6
Peach, SA., has identified the following overhead costs and cost drivers for next year: $$\begin{array} { l c l l } \text { Overhead Item } & \text { Expected Cost } & \multicolumn{1}{c} { \text { Cost Driver } } & \text { Expected Quantity } \\\text { Setup costs } & £ 200,000 & \text { Number of setups } & 500 \\\text { Ordering costs } & 80,000 & \text { Number of orders } & 3,200 \\\text { Maintenance } & 400,000 & \text { Machine hours } & 4,000 \\\text { Power } & 40,000 & \text { Kilowatt hours } & 80,000\end{array}$$ The following are two of the jobs completed during the year: $\begin{array}{lll}&\underline{\text { Job } 400}&\underline{\text { Job } 401}\\\text { Direct materials } & £ 750 & £ 2,000 \\\text { Direct labour } & £ 700 & £ 2,400 \\\text { Units completed } & 100 & 160 \\\text { Direct labour hours } & 50 & 80 \\\text { Number of setups } & 1 & 4 \\\text { Number of orders } & 4 & 5 \\\text { Machine hours } & 20 & 25 \\\text { Kilowatt hours } & 30 & 50\end{array}$

The company's normal activity is 4,000 direct labour hours.
-Refer to Figure 11-6. If Peach, SA., used direct labour hours to assign overhead, the unit cost for Job 401 would be

• A)£117.50.
• B)£111.88.
• C)£105.00.
• D)£102.50.

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Definitions:

Sample Mean

The average value calculated from a sample of a population.

Sampling Distribution

The probability distribution of a statistic obtained through a large number of samples drawn from a specific population.

Simple Random Samples

A subset of a population where every member has an equal chance of being selected, ensuring unbiased representation.

Standard Error

A measure of the sampling variability of an estimator, indicating the uncertainty around the estimate of a population parameter.