Fidelity Stereo Company Has Provided the Following Information Regarding Its $\$ 77$

question 78

Multiple Choice

Fidelity Stereo Company has provided the following information regarding its activity-based costing system: Purchasing department costs are allocated based on purchase orders, and the predetermined overhead allocation rate is $\$ 77$ per purchase order.

Assembly department costs are allocated based on the number of parts used, and the predetermined overhead allocation rate is $\$ 5$ per part.

Packaging department costs are allocated based on the number of units produced, and the predetermined overhead allocation rate is $\$ 4$ per unit produced. Each stereo produced has 50 parts,and the direct materials cost per unit is $70.There are no direct labor costs.Fidelity Stereo has an order for 1200 stereos,which will require 45 purchase orders in all.What is the total cost for the 1200 stereos?

• A) $392,265
• B) $307,950
• C) $303,465
• D) $388,800

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Definitions:

Standard Time

The predetermined or set amount of time allocated for completing a specific task under normal working conditions.

Performance Rating

An evaluation of an employee's job performance, often used for feedback or determining promotions and raises.

Task Times

The duration required to complete specific tasks, often used in planning and scheduling work processes.

Job Enrichment

The process of making a job more rewarding, engaging, and satisfying for the employees by adding more meaningful tasks and giving them more autonomy.