(Appendix 2A) Njombe Corporation Manufactures a Variety of Products

question 8

Multiple Choice

(Appendix 2A) Njombe Corporation manufactures a variety of products. In the past, Njombe has been using a traditional costing system in which the predetermined overhead rate was 150% of direct labor cost. Selling prices had been set by multiplying total product cost by 200%. Sensing that this system was distorting costs and selling prices, Njombe has decided to switch to an activity-based costing system for manufacturing overhead costs that uses the three activity cost pools listed below. Selling prices are still to be set at 200% of unit product cost under the new system. Information on these cost pools for next year are as follows:
Information (on a per unit basis) related to three popular products at Njombe are as follows:

-In comparing the traditional system with the activity-based costing system,which of Njombe's Models had higher unit product costs under the traditional system?

• A) #19
• B) #58
• C) #19 and #58
• D) #36 and #58

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Definitions:

Concerns

Worries or matters that occupy one's mind, relating to issues of interest or importance to an individual or group.

Neglecting

The act of not providing necessary care, attention, or support, potentially leading to harm or detriment in various contexts.

Title VII

A section of the Civil Rights Act of 1964 that prohibits employment discrimination based on race, color, religion, sex, and national origin.

Civil Rights Act

A landmark piece of legislation in the United States that outlaws discrimination based on race, color, religion, sex, or national origin.