Tranquility Company Manufactures Ceiling Fans and Uses an Activity-Based Costing

question 147

Multiple Choice

Tranquility Company manufactures ceiling fans and uses an activity-based costing system. Each ceiling fan has 20 separate parts. The direct materials cost is $95 and each ceiling fan requires 2.50 hours of machine time to manufacture. There is no direct labor. Additional information is as follows: $$\begin{array} { | l | l | r | } \hline \text { Activity } & \text { Allocation Base } & \begin{array} { c } \text { Predetermined Overhead } \\\text { Allocation Rate }\end{array} \\\hline \text { Materials handling } & \text { Number of parts } & \$ 0.07 \\\hline \text { Machining } & \text { Machine hours } & 7.40 \\\hline \text { Assembling } & \text { Number of parts } & 0.40 \\\hline \text { Packaging } & \text { Number of finished units } & 2.50 \\\hline\end{array}$$ What is the total manufacturing cost per ceiling fan? (Round any intermediate calculations and your final answer to the nearest cent.)

• A) $106.90
• B) $114.90
• C) $122.90
• D) $125.40

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Definitions:

Meters Per Second

A measurement of speed indicating how many meters are traveled in one second.

Action Potential

A rapid rise and subsequent fall in voltage or membrane potential across a cellular membrane with a characteristic pattern, crucial for nerve signal transmission.

Refractory Periods

Refractory periods are times following an action potential during which a neuron is less responsive to stimuli, ensuring the unidirectional flow of the signal.

Synaptic Knob

The end part of an axon that makes a synaptic contact with another neuron, responsible for the release of neurotransmitters.