Tranquility Company Manufactures Ceiling Fans and Uses an Activity-Based Costing

question 53

Multiple Choice

Tranquility Company manufactures ceiling fans and uses an activity-based costing system.Each ceiling fan has 20 separate parts.The direct materials cost is $75 and each ceiling fan requires 2.00 hours of machine time to manufacture.There is no direct labor.Additional information is as follows: $$\begin{array} { | l | l | l | } \hline \text { Activity } & \text { Allocation Base } & \begin{array} { l } \text { Predetermined Overhead } \\\text { Allocation Rate }\end{array} \\\hline \text { Materials handling } & \text { Number of parts } & \$ 0.06 \\\hline \text { Machining } & \text { Machine hours } & 6.00 \\\hline \text { Assembling } & \text { Number of parts } & 0.35 \\\hline \text { Packaging } & \text { Number of finished units } & 3.40 \\\hline\end{array}$$ What is the total manufacturing cost per ceiling fan? (Round any intermediate calculations and your final answer to the nearest cent.)

• A) $86.60
• B) $88.20
• C) $95.20
• D) $98.60

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