Miramar Industries Manufactures Two Products: a and B

question 7

Multiple Choice

Miramar Industries manufactures two products: A and B.  The manufacturing operation involves three overhead activities-production setup, material handling, and general factory activities.  Miramar uses activity-based costing to allocate overhead to products.  An activity analysis of the overhead revealed the following estimated costs and activity bases for these activities: What is the total overhead allocated to Product A using activity-based costing?

• A) $194,500
• B) $162,500
• C) $32,000
• D) $224,000

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Definitions:

Straight-Line Depreciation

A method of allocating the cost of a tangible asset evenly over its useful life.

Capital Budgeting

The process of evaluating and selecting long-term investments that are in line with the company's strategic objectives, focusing on projects that will generate value over time.

Incremental Sales

The increase in sales revenue attributed to a specific marketing effort or event.

Operating Expenses

Costs incurred in the day-to-day operations of a business, excluding the cost of goods sold, such as rent, salaries, and utilities.