Louis Corporation,which Uses an Activity-Based Costing System,produces Travel Trailers and Boat

question 183

Multiple Choice

Louis Corporation,which uses an activity-based costing system,produces travel trailers and boat trailers.The company allocates batch setup costs to the two products using the following basic data: $$\begin{array} { | l | r | r | } \hline & \text { Travel trailers } & \text { Boat trailers } \\\hline \text { Budgeted urits to be produced } & 2,000 & 3,000 \\\hline \text { Budgeted number of setups } & 380 & 420 \\\hline \text { Budgeted number of direct labor hours per unit } & 20 & 10 \\\hline\end{array}$$ Total budgeted setup costs for the year are $140,000.
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If the setup costs are allocated using direct labor hours,how much of the total setup costs would be allocated to boat trailers?

• A)$ 60,000
• B)$ 105,000
• C)$ 140,000
• D)$ 326,667

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Definitions:

Position Power

The authority and influence a person possesses within an organization due to the role or position they hold.

Legitimate

Conforming to established laws, rules, or standards, often carrying the implication of being justified or official.

Coercive

Relating to or using force or threats to persuade someone to do something or to achieve compliance.

Process

A sequence of measures or procedures executed to accomplish a specific goal.