Gregory Enterprises Has Identified Three Cost Pools to Allocate Overhead

question 25

Multiple Choice

Gregory Enterprises has identified three cost pools to allocate overhead costs.The following estimates are provided for the coming year: $$\begin{array} { l r l r } \text { Cost Pool } & \text { Overhead Costs } & \text { Cost driver } & \text { Activity level } \\\text { Supervision of direct labor } & \$ 320,000 & \text { Direct labor-hours } & 800,000 \\\text { Machine maintenance } & \$ 120,000 & \text { Machine-hours } & 960,000 \\\text { Facility rent } & \$ 200,000 & \text { Square feet of area } & 100,000 \\\text { Total overhead costs } & \$ 640,000 & &\end{array}$$ The accounting records show the Mossman Job consumed the following resources:
$$\begin{array}{ll}\text { Cost driver } & \text { Actual level } \\\text { Direct labor-hours } & 200 \\\text { Machine-hours } & 1,600 \\\text { Square feet of area } & 50\end{array}$$ Which method of allocation probably best estimates actual overhead costs used? Why?

• A) Single direct labor-hours cost driver because it is best to allocate total costs uniformly to individual jobs.
• B) Single direct labor-hours cost driver because it is easiest to analyze and interpret.
• C) Three activity-cost drivers because they best reflect the relative consumption of resources.
• D) Three activity-cost drivers because product costs can be significantly cross-subsidized.

Apprehend the relationship between trade policies and protection of domestic industries.

Discuss the theoretical underpinnings and criticisms of mercantilism and neo-mercantilist policies in contemporary economies.

Understand and identify the normal balance side for various accounts.

Recognize and classify different types of errors in the journalizing and posting process.

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Definitions:

Political Behaviour

Political behaviour refers to the actions and attitudes of individuals and groups regarding politics, including voting, party affiliation, and civic participation.

Frame Issues

The practice of constructing a particular viewpoint or perspective from which issues are analyzed and discussed.

Absolute Deprivation

A condition where individuals or groups lack the minimum amount of income or resources needed to maintain basic living standards and health.

Relative Deprivation

A subjective feeling of being worse off than others with whom one compares oneself, often leading to dissatisfaction or discontent.