Answer the Following Questions Using the Information Below

question 35

Multiple Choice

Answer the following questions using the information below:
Nichols, Inc., manufactures remote controls. Currently the company uses a plant-wide rate for allocating manufacturing overhead. The plant manager believes it is time to refine the method of cost allocation and has the accounting department identify the primary production activities and their cost drivers:
The current traditional cost method allocates overhead based on direct manufacturing labor hours using a rate of $200 per labor hour.
-What are the indirect manufacturing costs per remote control assuming an activity-based-costing method is used and a batch of 100 remote controls are produced? The batch requires 500 parts, 10 direct manufacturing labor hours, and 5 minutes of inspection time.

• A)$12.15 per remote control
• B)$1215 per remote control
• C)$24.30 per remote control
• D)$48.60 per remote control

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Definitions:

Decision Rights

The rights or authority to make decisions regarding specific aspects of business operations, typically distributed across various levels of an organization.

Relevant Information

Information that is applicable and crucial for decision-making processes in a business or project.

Incentive Based Compensation

A form of payment designed to reward employees for achieving specific performance targets or objectives.

Performance Measures

Metrics or indicators used to evaluate and track the efficiency, effectiveness, and productivity of an organization, employee, or process.