Sparrow Manufacturing Manufactures Small Parts and Uses an Activity-Based Costing

question 158

Multiple Choice

Sparrow Manufacturing manufactures small parts and uses an activity-based costing system. $\begin{array}{|l|r|l|l|}\hline \text { Activity } & \begin{array}{l}\text { Est. Indirect Activity } \\\text { Costs }\end{array} & \text { Allocation base } & \text { Cost allocation rate } \\\hline \text { Materials } & \$ 70,000 & \text { Material moves } & \$ 2.00 / \text { move } \\\hline \text { Assembling } & \$ 240,000 & \text { Direct labor hours } & \$ 8.00 / \text { dir. labor hour } \\\hline \text { Packaging } & \$ 80,000 & \text { \# of finished units } & \$ 0.80 / \text { finished unit } \\\hline\end{array}$
The following parts were produced in October with the following information:
$\begin{array} { | l | r | r | r | r | } \hline \text { Part } & \text { \# Produced } & \text { Materials Costs } & \text { \# Moves } & \text { Dir. Labor Hrs. } \\\hline \text { A } & 2,500 & \$ 2,500 & 800 & 200 \\\hline \text { B } & 3,500 & \$ 7,000 & 1,500 & 300 \\\hline \text { C } & 4,500 & \$ 11,250 & 2,200 & 1,000 \\\hline\end{array}$
- Total unit cost for part B is:

• A)$6.06.
• B)$4.34.
• C)$3.08.
• D)$2.34.

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Definitions:

Attention

The mental process of concentrating on one piece of information, object, or activity while ignoring other stimuli.

Pleasure Receptors

Specialized nerve cells or neural mechanisms in the body that respond to certain stimuli by generating a sensation of pleasure or reward.

Cigarette Smokers

This term refers to individuals who habitually smoke cigarettes, a practice that involves burning tobacco and inhaling the smoke, which is associated with various health risks.

Nicotine Cigarettes

Cigarettes that contain nicotine, an addictive substance derived from tobacco, which can lead to addiction and various health issues.