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

question 36

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: 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:
The Model B radio requires 15 parts to construct, and also requires 18 machine hours of processing. What is the manufacturing cost to make one unit of Model B?

• A)$150.00
• B)$176.00
• C)$126.50
• D)$144.00

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Definitions:

Promotional Mix

A combination of marketing tools, including advertising, sales promotion, public relations, personal selling, and direct marketing, used to achieve communication objectives.

Direct Marketing

A form of advertising where companies communicate directly with consumers through mail, email, texts, and other channels, bypassing intermediary media.

Value

The importance, worth, or usefulness of something, often considered in terms of its perceived benefits relative to its cost.

Promotion Budget

Financial allocation for marketing communications and activities aimed at increasing consumer awareness, interest, and purchase of a product or service.