The Cosmo Corporation Manufactures and Assembles Office Chairs

question 218

Multiple Choice

The Cosmo Corporation manufactures and assembles office chairs. Cosmo uses an activity-based costing system to allocate all manufacturing conversion costs. Each chair consists of 15 separate parts totaling $125 in direct materials, and requires 2.0 hours of machine time to produce. Additional information follows: What is the cost of materials handling per chair?

• A)$26.25
• B)$7.50
• C)$5.50
• D)$4.00

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