Answer the Following Questions Using the Information Below:
Warne Limited

question 166

Multiple Choice

Answer the following questions using the information below:
Warne Limited 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:
$$\begin{array} { l r r } \text { Activities } & \text { Cost Driver } & \text { Allocation Rate } \\\text { Material handling } & \text { Number of parts } & \$ 3 \text { per part } \\\text { Assembly } & \text { Labour hours } & \$ 30 \text { per hour } \\\text { Inspection } & \text { Time at inspection station } & \$ 4.50 \text { per minute }\end{array}$$ The current traditional cost method allocates overhead based on direct manufacturing labour hours using a rate of $200 per labour hour.
-What are the indirect manufacturing costs per remote control assuming the traditional method is used and a batch of 500 remote controls is produced? The batch requires 1000 parts,10 direct manufacturing labour hours and 15 minutes of inspection time.

• A)$2.00 per remote control
• B)$2000.00 per remote control
• C)$0.25 per remote control
• D)$4.00 per remote control

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Definitions:

Compromise

A method of resolving disagreements where each party gives up something that it wants in order to reach an agreement.

Unconsciously Believes

Refers to beliefs that individuals hold without being aware of them, which can influence thoughts, feelings, and behaviors beyond conscious awareness.

Irrational

Characterized by actions or thoughts that lack reason or sound judgment, often driven by emotions rather than logical reasoning.

Emotional Part

A component of human psychology that involves feelings, moods, and affective states.