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

question 140

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)$51.32
• B)$76.97
• C)$510.32
• 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:
$$\begin{array} { | l | l | } \hline \text { Function } & \text { Haurly Rate} \\\hline 1 & \$ 10 \\\hline 2 & 7 \\\hline 3 & 18 \\\hline\end{array}$$

Refer to Glassman Company If total overhead is assigned to A and B on the basis of direct labor hours,Product B will have an overhead cost per unit of

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Definitions:

Nominal Money Assets

Financial assets measured in monetary terms without adjustment for inflation, representing their face value at a point in time.

Price Level

A measure of the average prices of goods and services in an economy, indicating the purchasing power of money and the cost of living.

Aggregate Demand-Aggregate Supply Diagram

A graphical representation used in macroeconomics to illustrate the relationship between total demand and total supply in an economy.

Full Employment

An economic situation in which all available labor resources are being used in the most efficient way possible, essentially meaning that unemployment is at the lowest possible level without causing inflation.