A Company Identified the Following Partial List of Activities,costs,and Activity

question 63

Multiple Choice

A company identified the following partial list of activities,costs,and activity drivers expected for the next year:
$$\begin{array} { | l | c | l | } \hline \text { Activity } & \text { Expected Costs } & { \text { Cost Driver } } \\\hline \text { Extrusion costs } & \$ 83600 & \text { Number batches made } \\\hline \text { Handling costs } & \$ 8,800 & \text { Number of orders Filled } \\\hline \text { Packaging costs } & \$ 40,500 & \text { Number of units made } \\\hline\end{array}$$
$$\begin{array} { | l | c | c | } \hline & \text { Product A } & \text { Product B } \\\hline \text { Production volume } & 750,000 \text { units } & 600,000 \text { units } \\\hline \text { Batches rmade } & 200 \text { batches } & 750 \text { batches } \\\hline \text { Orders Filled } & 75 & 200 \\\hline\end{array}$$
Calculate activity rates for each of the three activities using activity-based costing (ABC) .

• A) Extrusion: $304 per batch; handling: $32 per unit; packaging: $.03 per unit.
• B) Extrusion: $88 per batch; handling: $32 per order; packaging: $.03 per unit.
• C) Extrusion: $88 per order; handling: $32 per unit; packaging: $.03 per batch.
• D) Extrusion: $418 per batch; handling: $117.33 per order; packaging: $.054 per unit.
• E) Extrusion: $118.13 per batch; handling: $44 per order; packaging: $.0675 per unit.

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Definitions:

Oxygen Consumption

The process by which living organisms utilize oxygen to metabolize organic compounds and produce energy.

Exercise

Physical activity that is planned, structured, and repetitive for the purpose of conditioning any part of the body.

Myoglobin

An oxygen-binding protein found in the muscle tissues of vertebrates, similar to hemoglobin, which stores oxygen for use during muscular activity.

Skeletal Muscle

A type of muscle that is attached to bones and allows movement by contracting and relaxing.