Use the Following Information for the Next 5 Questions

question 98

Multiple Choice

Use the following information for the next 5 questions.
The managers at Ithaca Manufacturing are discussing ways to allocate the cost of support departments such as Quality Control and Maintenance to the operating departments. To aid them in this discussion, the controller has provided the following information.
-(CMA) If Ithica Manufacturing decides not to allocate support costs to the operating departments, the overhead allocated to each direct labor hour in the Assembly Department would be

• A) $3.20
• B) $3.50
• C) $12.00
• D) $16.00

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Definitions:

Just-In-Time

An inventory management strategy that aligns raw-material orders from suppliers directly with production schedules to reduce stock levels and increase efficiency.

Production Flexibility

The capability of a manufacturing system to adapt efficiently to changes such as new product introductions, production volume adjustments, and design alterations.

Corporate Governance

The system by which a company is directed and controlled. If properly implemented it should provide incentives for top management to pursue objectives that are in the interests of the company and it should effectively monitor performance.

Annual Tax Returns

are yearly reports filed with a governmental body declaring income, profits, and losses to determine tax liability.