Vintage Fun Reproduces Old-Fashioned Style Roller Skates and Skateboards

question 177

Multiple Choice

Vintage Fun reproduces old-fashioned style roller skates and skateboards. The annual production and sales of roller skates is 950 units, while 1,750 skateboards are produced and sold. The company has traditionally used direct labor hours to allocate its overhead to products. Roller skates require 2.5 direct labor hours per unit, while skateboards require 1.25 direct labor hours per unit. The total estimated overhead for the period is $114,300. The company is looking at the possibility of changing to an activity-based costing system for its products. If the company used an activity-based costing system, it would have the following three activity cost pools: The cost pool activity rate for Engineering Costs would be closest to

• A)$15.00 per engineering hour.
• B)$10.00 per engineering hour.
• C)$20.00 per engineering hour.
• D)$7.54 per engineering hour.

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Definitions:

Ethnocentrism

Viewing one's own culture as superior to others and using it as a benchmark to evaluate foreign cultures.

Stereotyping

The act of categorizing individuals or groups into oversimplified and generalized roles or attributes based on perceived characteristics.

Preconceptions

Pre-existing beliefs or opinions formed before having evidence or experience.

Assumptions

Beliefs or statements taken for granted without proof, often used as a basis for reasoning or argument.