Watson's Computer Company Uses ABC to Account for Its Manufacturing

question 179

Multiple Choice

Watson's Computer Company uses ABC to account for its manufacturing process. Watson's Computer Company expects to produce 2330 computers. Watson's Computer Company also expects to use 11,000 parts and have 10 setups.
The allocation rate for materials handling will be (Round all answers to two decimal places.)

• A)$5.00
• B)$6.48
• C)$23.61
• D)$8.40

Comprehend the principles of periodic reporting and the time period assumption in accounting.

Understand the function and recording of adjusting entries in the accounting cycle.

Comprehend the concept and application of accrual accounting versus cash basis accounting.

Describe the purpose of adjusted and unadjusted trial balances and their roles in preparing financial statements.

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Definitions:

Customer Needs

The wants and preferences that consumers have regarding a product or service that drive their buying behavior.

Market Share

The ratio of sales revenue of the firm to the total sales revenue of all firms in the industry, including the firm itself.

Wants and Needs

Essential drivers of consumer behavior; needs are basic requirements for survival, while wants are desires for specific satisfiers of these needs.

Cost-effective

A term describing a process, action, or method that achieves its intended outcomes without excessive expenditure, providing the best possible return on investment.