Borsetta,Inc

question 140

Multiple Choice

Borsetta,Inc.manufactures two kinds of bags-totes and satchels.The company allocates manufacturing overhead using a single plantwide rate with direct labor cost as the allocation base.Estimated overhead costs for the year are $25,000.Additional estimated information is given below.

Calculate the amount of overhead to be allocated to Satchels,if the actual units produced and direct labor costs equal the estimated amounts.(Round any percentages to two decimal places and your final answer to the nearest dollar. )

• A)$463
• B)$13,991
• C)$11,007
• D)$22,940

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Definitions:

Maximize Profits

The goal of increasing the difference between revenue and expenses to the highest possible level.

Minimize Losses

a strategy or approach aimed at reducing the amount of financial or production losses to the lowest possible level.

Losses

Negative financial outcomes resulting from the cost of operations exceeding revenue or from other financial transactions.

Shut Down

A short-run decision by a firm to cease production due to unfavorable market conditions, not covering variable costs.