Quality Stereo Company Has Provided the Following Information Regarding Its

question 49

Multiple Choice

Quality Stereo Company has provided the following information regarding its activity-based costing system: • Purchasing department costs are allocated based on the number of purchase orders and the cost allocation rate is $75 per purchase order.
• Assembly department costs are allocated based on the number of parts used and the cost allocation rate is $1.00 per part.
• Packaging department costs are allocated based on the number of units produced and the allocation rate is $2.00 per unit produced.
Each stereo produced has 50 parts, and the direct materials cost per unit is $70. There are no direct labor costs. Quality Stereo has an order for 1,000 stereos which will require 50 purchase orders in all. What is the total cost of the 1,000 stereos?

• A)$125,750
• B)$55,750
• C)$123,750
• D)$122,000

Describe the threats and challenges facing Canada's wetlands.

Analyze factors contributing to the decline of specific fish populations.

Explore solutions to reduce bycatch in fishing industries.

Understand the ethical and cultural debates surrounding whaling.

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Definitions:

Predetermined Overhead Rate

A rate calculated prior to the accounting period that is used to allocate overhead costs to products or job orders, based on estimated overhead costs and an allocation base.

Job-Order Costing

A cost accounting system that accumulates costs according to specific jobs or orders, allowing for detailed cost tracking.

Manufacturing Cost

The total expense incurred in the production of goods, including direct materials, direct labor, and manufacturing overhead.

Machine-Hours

A measure of the amount of time machines are running in the production process, used as a basis for allocating overhead costs.