Jahnel Corporation Is Conducting a Time-Driven Activity-Based Costing Study in Its

question 310

Multiple Choice

Jahnel Corporation is conducting a time-driven activity-based costing study in its Tech Support Department. The company has provided the following data to aid in that study: On the Customer Cost Analysis report in time-driven activity-based costing, the time-driven activity rate for Preparing Change Orders would be closest to:

• A) $13.60 per change order prepared
• B) $1.18 per change order prepared
• C) $0.40 per change order prepared
• D) $34.00 per change order prepared

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Definitions:

Traditional Costing Method

An accounting method that assigns indirect costs to products based on a predetermined overhead rate, often not reflecting the actual consumption of resources by each product.

Direct Labor-Hours

The total number of hours worked directly on the production of goods.

Overhead Assigned

The process of allocating manufacturing overhead costs to specific products or cost objects based on a predetermined rate or method.

Overhead Applied

The assigning of overhead costs to goods produced based on a predetermined rate or basis such as machine hours or labor hours.