Quality Stereo Company Has Provided the Following Information Regarding Its

question 46

Multiple Choice

Quality Stereo Company has provided the following information regarding its activity-based costing system: • Purchasing department costs are allocated based on purchase orders,and the predetermined overhead allocation rate is $79 per purchase order.
• Assembly department costs are allocated based on the number of parts used,and the predetermined overhead allocation rate is $2 per part.
• Packaging department costs are allocated based on the number of units produced,and the predetermined overhead allocation rate is $2 per unit produced.
Each stereo produced has 50 parts,and the direct materials cost per unit is $62.There are no direct labor costs.Quality Stereo has an order for 1,000 stereos,which will require 40 purchase orders in all.What is the total cost for the 1,000 stereos?

• A)$167,160
• B)$104,480
• C)$103,160
• D)$164,000

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Definitions:

Suppliers

Businesses or individuals that provide goods or services to another entity along a supply chain, playing a vital role in production and distribution processes.

Multiple Suppliers

The strategy of sourcing a particular product or service from more than one supplier to reduce supply risk.

Supply Disruption

An unexpected event that interrupts the normal flow of goods and materials in a supply chain, potentially leading to stockouts, increased costs, or delivery delays.

Incentive

A factor, often a form of reward or penalty, that motivates individuals to perform an action or behave in a certain manner.