Orlando Avionics Makes Three Types of Radios for Small Aircraft-Model

question 20

Multiple Choice

Orlando Avionics makes three types of radios for small aircraft-model A, model B, and model C. The manufacturing operations are mechanized and there is no direct labor. Manufacturing overhead costs are significant, and Orlando has adopted an activity-based costing system. Direct materials costs per unit for each model are as follows:
Model A $28
Model B $32
Model C $40
Orlando has three activities-assembly, materials management, and testing. The cost driver for assembly is machine hours. The cost driver for materials management is number of parts, and the cost driver for testing is the number of units of product. Total costs and production volumes for the year 2012 were estimated as follows:
$$\begin{array} { | l | r | r | r | } \hline & \text { Total cost } & { \text { Total units } } & \\\hline \text { Assembly } & \$ 780,000 & 120,000 & \text { Machine hours } \\\hline \text { Materials management } & \$ 120,000 & 80,000 & \text { Parts } \\\hline \text { Testing } & \$ 22,500 & 5,000 & \text { Units } \\\hline\end{array}$$
-
What is the allocation rate for the Assembly activity? (Please round to the nearest cent.)

• A) $7.69 per machine hour
• B) $0.60 per machine hour
• C) $0.15 per machine hour
• D) $6.50 per machine hour

---

Definitions:

Cranial Nerves

Twelve pairs of nerves that emerge directly from the brain, not the spinal cord, and pass through various foramina of the skull to innervate the head, neck, and visceral organs directly.

Medulla Oblongata

A portion of the brainstem responsible for autonomic functions such as breathing, heart rate, and blood pressure control.

Midbrain

A part of the brainstem involved in functions such as vision, hearing, motor control, sleep/wake, arousal (alertness), and temperature regulation.

Diencephalon

A part of the brain containing elements including the thalamus and hypothalamus, responsible for sensory processes and involuntary bodily operations.