Alpha Company Manufactures Breadboxes and Uses an Activity-Based Costing System

question 101

Multiple Choice

Alpha Company manufactures breadboxes and uses an activity-based costing system. The following information is provided for the month of May: $$\begin{array} { | l | c | c | c | } \hline \text { Activity } & \begin{array} { c } \text { Estimated Indirect } \\\text { Activity Costs }\end{array} & \text { Allocation Base } & \begin{array} { c } \text { Estimated Quantity of } \\\text { Allocation Base }\end{array} \\\hline \text { Materials handling } & \$ 3,500 & \text { Number of parts } & 5,000 \text { parts } \\\hline \text { Assembling } & \$ 12,000 & \text { Number of parts } & 5,000 \text { parts } \\\hline \text { Packaging } & \$ 5,750 & \begin{array} { c } \text { Number of bread } \\\text { boxes }\end{array} & 1,250 \text { bread boxes } \\\hline\end{array}$$ Each breadbox consists of 4 parts, and the direct materials cost per breadbox is $7.00. There is no direct labor. What is the total manufacturing cost per breadbox?

• A) $17.40
• B) $24.00
• C) $12.40
• D) $26.00