Kramer Company Manufactures Coffee Tables and Uses an Activity-Based Costing

question 214

Multiple Choice

Kramer Company manufactures coffee tables and uses an activity-based costing system to allocate all manufacturing conversion costs. Each coffee table consists of 20 separate parts totaling $240 in direct materials, and requires 5.0 hours of machine time to produce. Additional information follows: What is the number of finished coffee tables?

• A)20
• B)100
• C)250
• D)Cannot be determined from the information given

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Definitions:

Annual Cost

The total expense associated with operating a business or owning an asset for one year.

First Year

Typically refers to the initial year of an educational course, professional endeavor, or any period's start.

Total Revenue

The total income generated from the sale of goods or services before any expenses are deducted.

Fourth Year

Typically refers to the final year of a standard four-year undergraduate degree program at a college or university.