Kozlov Corporation Has Provided the Following Data from Its Activity-Based

question 21

Multiple Choice

Kozlov Corporation has provided the following data from its activity-based costing system: $$\begin{array} { l l l } \text { Activity Cost Pool } & \text { Total Cost } & \text { Total Activity } \\\text { Assembly } & \$ 942,480 & 66,000 \text { machine hours } \\\text { Processing orders } & \$ 85,050 & 1,800 \text { orders } \\\text { Inspection } & \$ 126,854 & 1,820 \text { inspection hours }\end{array}$$ The company makes 430 units of product A21W a year, requiring a total of 690 machine-hours, 40 orders, and 10 inspection-hours per year. The product's direct materials cost is $35.72 per unit and its direct labor cost is $29.46 per unit.
- According to the activity-based costing system, the total overhead cost of producing 430 units of A21W is:

• A) $13,338.20
• B) $11,121.40
• C) $12,440.20
• D) $12,215.70
• E) $32,370.00

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Definitions:

Merger

The combination of two or more companies into a single entity, typically to achieve synergistic benefits, expand market reach, or gain efficiencies.

Purchase Accounting Method

An accounting method used in mergers and acquisitions to consolidate the financial statements of both companies, where the purchaser's statements incorporate the assets and liabilities of the acquired company at their fair market values.

Goodwill

An intangible asset that arises when a company acquires another company for more than the fair market value of its assets.

Net Working Capital

Net working capital is a measure of a company's short-term financial health, calculated as the difference between its current assets and current liabilities.