Use the Information Below to Answer the Following Question(s)

question 61

Multiple Choice

Use the information below to answer the following question(s) .
Data Source Media manufactures cassettes and CDs. Management is attempting to set the budget for the coming year. Two divisions (Cassette and CD) of the company utilize one plant location. The following data have been prepared for review.

-What is the fixed cost per year and the variable cost per hour, respectively, for the Cassette Department using the dual-rate method, assuming that the allocation bases are capacity for fixed costs and actual usage for variable costs?

• A) $720,000 and $480
• B) $720,000 and $600
• C) $765,958 rounded and $480
• D) $765,958 rounded and $600
• E) $900,000 and $600

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Definitions:

Direct Labor Hours

The total hours worked by employees directly involved in manufacturing a product or providing a service.

Finished Goods

Inventory items that have completed the manufacturing process and are ready for sale to customers.

Direct Labor Cost

The expense related to the work of employees directly involved in the production of goods or services, such as wages for assembly line workers.

Direct Labor-Hours

Direct labor-hours are the total number of hours worked by employees directly involved in the manufacturing process, used as a basis for assigning labor costs to products.