Use the Information Below to Answer the Following Questions $\text { Production for April is } 10,000 \text { racquets }$

question 27

Multiple Choice

Use the information below to answer the following questions.
Whack Ltd, a tennis racquet manufacturer, has broken the production process into three lines, each in a different department: framing, stringing, and finishing. The following information relates to each department for the month of April: $\begin{array}{llll} & \text { FRAMING } & \text { STRINGING } & \text { FINISHING } \\\text { Direct Costs } & \$ 20,000 & \$ 30,000 & \$ 66,000 \\\text { Ind irect Costs } & \$ 10,000 & \$ 20,000 & \$ 30,000 \\\text { Labour Hours } & 2,000 \mathrm{hrs} & 5,000 \mathrm{hrs} & 3,000 \mathrm{hrs}\\\text { Machine hours } & 500 \mathrm{hr} s\end{array}$
$\text { Production for April is } 10,000 \text { racquets }$
-Refer to the table above. The overhead recovery rate for stringing and finishing based on direct labour hours is:

• A)$6; $11.
• B)$4; $10.
• C)$10; $22.
• D)$5; $ 3.

---

Definitions:

Residual Value

The estimated amount that an asset is expected to realize upon its disposal at the end of its useful life.

Annual Depreciation

The portion of the total cost of a tangible asset that is expensed each year over its useful life.

Book Value

A rephrased definition: The net value of an asset or liability recorded on the financial statements, factoring in depreciation, amortization, and impairment, but not necessarily indicative of market value.

Activity-Based Method

An accounting method that assigns costs to products or services based on the activities and resources that go into producing them, to more accurately reflect the costs associated with each product or service.