Kenney Company Uses Activity-Based Costing to Account for Its Manufacturing

question 46

Multiple Choice

Kenney Company uses activity-based costing to account for its manufacturing process. Kenney Company produces tires, and each tire has $.50 of direct materials, includes 20 parts and requires 2 hours of machine time. There is no direct labor. Additional information follows:
$\begin{array}{|l|l|r|}\hline\text { Activity }&\text { Allocation Base }&\text { Cost Allocation Rate }\\\hline \text { Materials handling } & \text { Number of parts } & \$ .16\\\hline \text { Machining } & \text { Machine hours } & \$ 14.40 \\\hline \text { Assembling } & \text { Number of parts } & \$ .70\\\hline \text { Packaging } & \text { Number of finished units } & \$ 5.40\\\hline\end{array}$


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What is the cost of assembling per tire?

• A) $15.40
• B) $7.00
• C) $14.00
• D) $28.00

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Definitions:

Cardiac Conduction

The system of electrical signals that initiate and regulate the heart's rhythm and beat.

Oxygenated Blood

Blood that has been enriched with oxygen in the lungs and is then transported by the arterial system to oxygenate the body's tissue.

Arterioles

Small branches of arteries that lead to capillaries, regulating blood flow and pressure by constricting or dilating.

Capillaries

Capillaries are the smallest blood vessels in the body, connecting arterioles and venules, and facilitating the exchange of water, oxygen, carbon dioxide, and many other nutrients and waste substances between blood and the tissues.