Newman Company Recently Installed an Activity-Based Relational Database -Refer to the Figure

question 125

Multiple Choice

Newman Company recently installed an activity-based relational database. Using the information contained in the activity relational table, the following pool rates were computed:
$400 per purchase order
$24 per machine hour, Process 1
$30 per machine hour, Process 2
$80 per engineering hour

Two products are produced by Special Products: X and Y. The plant has two manufacturing processes, Process 1 and Process 2. Other processes include engineering, product handling, and procurement. Product X goes through Process 1 while Product Y goes through Process 2. The product relational table for Special Products is as follows:
$\begin{array}{llr} &\text {Product X:}\\& \text {Activity Driver \# and Name}&\text { Activity Usage }\\1 & \text { Units } & 200,000 \\2 & \text { Purchase orders } & 250 \\3 & \text { Machine hours } & 80,000 \\4 & \text { Engineering hours } & 1,250\end{array}$



$\begin{array}{llc} &\text {Product X:}\\& \text {Activity Driver \# and Name}&\text { Activity Usage }\\1 & \text { Units } & 25,000 \\2 & \text { Purchase orders } & 125 \\3 & \text { Machine hours } & 10,000 \\4 & \text { Engineering hours } & 1,500\end{array}$
-Refer to the figure.What is the unit cost of Product Y?

• A)$10.60
• B)$12.00
• C)$18.80
• D)$504.00

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Definitions:

Centralization

The concentration of decision-making authority at the top levels of an organizational hierarchy.

Vertical Division

The organizational structure where tasks are divided based on hierarchy and levels of authority, creating a top-down approach.

Labor

The physical or mental effort used in the production of goods and services, often referring to work or workforce in economic contexts.

Spans Of Control

Refers to the number of subordinates that a manager or leader can effectively direct, supervise, and control.