Swanson Company Has Identified the Following Activities Related to Indirect

question 86

Short Answer

Swanson Company has identified the following activities related to indirect production costs:
$$\begin{array} { l l l } \text { Activity } & \text { Activity Costs } & \text { Cost Drivers } \\\text { Machine Setup } & \$ 180,000 & 1,500 \text { setup hours } \\\text { Materials Handling } & \$ 50,000 & 12,500 \text { pounds of materials } \\\text { Electric Power } & \$ 20,000 & 20,000 \text { kilowatt hours }\end{array}$$
Swanson Company has obtained the following data concerning two products:
$$\begin{array} { l l l } & \text { Product 1 } & \text { Product 2 } \\\text { Number of units produced } & 4,000 & 20,000 \\\text { Direct materials cost } & \$ 20,000 & \$ 25,000 \\\text { Direct labor cost } & \$ 12,000 & \$ 20,000 \\\text { Number of setup hours } & 100 & 120 \\\text { Pounds of materials used } & 500 & 1,500 \\\text { Kilowatt-hours } & 1,000 & 2,000\end{array}$$
Using activity-based costing,what amount of machine setup cost is assigned to Products 1 and 2?
$$\begin{array} { l l } &\text { Product 1 } & \text { Product } 2 \\A)&\$ 12,000 & \$ 14,400 \\B)&\$ 30,000 & \$ 150,000 \\C)&\$ 50,000 & \$ 130,000 \\D)&\$ 81,818 & \$ 98,182\end{array}$$

• A)&\$ 12,000 & \$ 14,400 \\
• B)&\$ 30,000 & \$ 150,000 \\
• C)&\$ 50,000 & \$ 130,000 \\
• D)&\$ 81,818 & \$ 98,182
• \end{array}\]

---

Definitions:

Ubiquitous

The condition of being everywhere at the same time, commonly used to describe technologies that have become an integral part of daily life.

IaaS

Infrastructure as a Service, a form of cloud computing that provides virtualized computing resources over the internet.

Technology Companies

Businesses that focus on the development, production, and marketing of electronics, software, computers, and other technological goods or services.

Vertical Clouds

Cloud computing environments that are tailored for use in specific industries, offering specialized resources and services to meet industry-specific requirements and regulations.