Glassman Company
Glassman Company Produces Two Products: a AndB Refer to Glassman Company If Total Overhead Is Assigned to Has

question 174

Multiple Choice

Glassman Company
Glassman Company produces two products: A andB.The company has three overhead functions that are required for both products.
Below is production information for Products A and B:

• A)$84.00.
• B)$88.64.
• C)$110.64.
• D)None of the responses are correct.

Product	Prime Costs (Direct Materials + Direct Labor)	Direct Labor Hours	Overhead Function #1	Overhead Function #2	Overhead Function #3
A	$35	4 hrs	2 hrs	1 hr	6 hrs
B	$22	1.5 hr	1 hr	8 hrs	1 hr

The company produces 800 units of Product A and 8,000 units of Product B each period.
The overhead functions have the following hourly costs:
$$\begin{array} { | l | l | } \hline \text { Function } & \text { Haurly Rate } \\\hline 1 & \$ 10 \\\hline 2 & 7 \\\hline 4 & 18 \\\hline\end{array}$$
Refer to Glassman Company If total overhead is assigned to A and B on the basis of units produced,Product B will have an overhead cost per unit of

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Definitions:

One-way ANOVA

A statistical test used to determine if there are statistically significant differences between the means of three or more independent (unrelated) groups based on one independent variable.

F-ratio

A statistical measure used in analysis of variance (ANOVA) to determine the degree of variation between sample means in comparison to variation within the samples.

Critical Value

A point on the test distribution that is compared to the test statistic to decide whether to reject the null hypothesis.

Degrees of Freedom

Refers to the number of independent values or quantities which can be assigned to a statistical distribution or a statistical test.