Answer the Following Questions Using the Information Below

question 124

Multiple Choice

Answer the following questions using the information below:
Gregory Enterprises has identified three cost pools to allocate overhead costs. The following estimates are provided for the coming year:
The accounting records show the Mossman Job consumed the following resources:

-If Gregory Enterprises uses the three activity cost pools to allocate overhead costs, what are the activity-cost driver rates for supervision of direct labor, machine maintenance, and facility rent, respectively?

• A)$0.60 per dlh, $0.025 per mh, $0.80 per sq ft
• B)$1.25 per dlh, $0.25 per mh, $0.50 per sq ft
• C)$0.40 per dlh, $0.05 per mh, $0.20 per sq ft
• D)$0.40 per dlh, $0.125 per mh, $2 per sq ft

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Definitions:

Output Effect

The change in total revenue resulting from selling more units of a product, potentially influenced by changes in price or quantity produced.

Substitute Resource

Alternative resources or inputs that can be used in place of another in the production process to produce a similar type of output.

Productivity

The efficiency with which input resources are converted into outputs, often measured as the ratio of output to input in a given time period.

Law of Diminishing Returns

The principle that as investment in a single factor of production increases, holding all others constant, the incremental gains in output will eventually decrease.