Moss Corporation Has the Following Activities: Creating Bills of Materials

question 140

Multiple Choice

Moss Corporation has the following activities: creating bills of materials (BOM) , studying manufacturing capabilities, improving manufacturing processes, training employees, and designing tooling. The general ledger accounts reveal the following expenditures for manufacturing engineering:
$$\begin{array} { l r } \text { Salaries } & \$ 5,000 \\\text { Equpment } & 40,000 \\\text { Supplies } & 10,000 \\\text { Total } & \$ 125000\end{array}$$ The equipment is used for two activities: improving processes and designing tooling.Thirty-five percent of the equipment's time is used for improving processes and 65 percent is used for designing tools.The salaries are for two engineers.One is paid $50,000,while the other earns $25,000.The $50,000 engineer spends 40 percent of his time training employees in new processes and 60 percent of his time on improving processes.The remaining engineer spends equal time on all activities.Supplies are consumed in the following proportions:
$\begin{array}{llr} \text { Creating BOMs} &25\%\\ \text { Studying capabilities} &10\%\\ \text { Improving processes } &20\%\\ \text { Training employees } &25\%\\ \text { Designing tooling } &20\%\end{array}$

-Refer to the figure.What is the cost assigned to the creating BOMs activity?

• A)$7,500
• B)$31,250
• C)$43,750
• D)$125,000

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Definitions:

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Items or services offered without charge, usually as part of a promotional strategy or as incentives.

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A type of good that is rivalrous and excludable, meaning its consumption by one individual prevents others from consuming it.

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A type of good that provides users with tangible benefits, but which is available to everyone, such as air, water, and fish in the open sea, leading to potential overuse problems.

Common Resource

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