Dawson Company Manufactures Two Products,Regular and Deluxe

question 30

Multiple Choice

Dawson Company manufactures two products,Regular and Deluxe.Overhead costs consist of machining,$2,500,000; and assembly,$1,250,000.Recent data are provided below: Regular Deluxe
Direct labor hours 10,000 15,000
Machine hours 10,000 30,000
Number of parts 90,000 160,000
Overhead allocated to Regular using a single overhead rate based on number of parts and using activity based costing,respectively,are:

• A)$2,400,000 and $2,625,000
• B)$937,500 and $2,812,500
• C)$1,350,000 and $1,125,000
• D)$1,075,000 and $2,675,000

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Definitions:

Required Rate Of Return

The minimum percentage return an investor expects to receive from an investment due to its risk level.

Tax Rate

The percentage at which an individual or corporation is taxed on their income.

Net Working Capital

The difference between a company's current assets and current liabilities, indicating its short-term financial health and efficiency.

Floor Inventory

The minimum amount of goods that a retailer keeps on the shop floor to ensure an adequate supply for normal sales volumes.