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

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Definitions:

St Martin-in-the-Fields

An iconic Anglican church located in Trafalgar Square, London, known for its neoclassical design and cultural events.

Classical Temples

Temples from the classical period of ancient Greece and Rome, distinguished by their use of columns and symmetry.

Neoclassical Follies

Ornamental buildings without practical purpose, built during the Neoclassical period, often emulating classical styles and serving as decorative landscape elements.

Picturesque Garden

An “unordered” garden designed in accord with the Enlightenment taste for the natural.