Sheddon Industries Produces Two Products The Company's Overhead Costs of $108,000 Are Allocated Based on as Follows

question 115

Multiple Choice

Sheddon Industries produces two products. The products' identified costs are as follows: $$\begin{array} { l c c } & \text { Product A } & \text { Product B } \\\text { Direct materials } & \$ 20,000 & \$ 15,000 \\\text { Direct labor } & 12,000 & 24,000\end{array}$$ The company's overhead costs of $108,000 are allocated based on labor cost. Assume 4,000 units of product A and 5,000 units of Product B are produced. What amount of production costs would be assigned to Product A? (Do not round intermediate calculations.)

• A) $36,000
• B) $111,000
• C) $68,000
• D) None of the answers are correct.

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Definitions:

Treasury Stock

Stocks that the issuing entity initially distributed and then bought back, decreasing the number of shares available for trade on the open market.

Par Value

The face or nominal value of a bond, stock share, or coupon as specified on a certificate or instrument.

Stock Dividend

A payment made by a corporation to its shareholders in the form of additional shares, rather than cash, reflecting the company's intention to reinvest profits.

Retained Earnings

Profits that a company keeps or reinvests for expansion or debt payment, rather than distributing to shareholders as dividends.