Franklin Manufacturing Manufactures Two Models of Windows,bay Windows and Casement

question 93

Multiple Choice

Franklin Manufacturing manufactures two models of windows,bay windows and casement windows.Franklin uses an activity based costing system.The following information about the activities used to producet the company's products has been provided. Produce
Agree.Change made.JMF $\begin{array}{|l|c|c|c|c|}\hline {\text { Category }} & {\text { Estimated Cost }} & \text { Cost Driver } & \text { Bay Windows } & \text { Casement } \\\hline \text { Unit-level } & \$ 125,000 & \text { Labor hours } & 750 & 500 \\\hline \text { Batch-level } & \$ 75,000 & \text { Inspections } & 30 & 20 \\\hline \text { Product-level } & \$ 35,000 & \text { Storage Space } & 3500 \text { sq feet } & 2100 \text { sq feet } \\\hline \text { Facility-level } & \$ 165,000 & \text { Machine hours } & 9,000 & 6,000 \\\hline\end{array}$ If bay windows and casement windows require the same amount of direct labor,using labor hours as the allocation base for facility-level costs would:

• A) undercost the casement windows.
• B) overcost the bay windows.
• C) undercost both the bay windows and casement windows.
• D) None of these answers is correct.
• Produce
• Agree.Change made.JMF

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Definitions:

Achievement

Accomplishing a goal or reaching a target after effort, skill, or courage has been applied.

Vroom's Expectancy Theory

A theory of motivation that suggests an individual's behavior is determined by their expected results or outcomes of actions.

Likelihood

The chance or probability of a specific event occurring within a given context or set of circumstances.

Results

Outcomes or outputs arising from actions, processes, or events, often measured to assess performance or effectiveness.