Use the Information Below to Answer the Following Question(s)

question 183

Multiple Choice

Use the information below to answer the following question(s) :
Hinckley & Granger Company had the following activities, estimated indirect activity costs, and allocation bases:

Hinckley & Granger uses activity-based costing.
The above activities are used by Departments P and Q as follows:

-What is the cost per driver unit for the correspondence activity?

• A) $1.50
• B) $10.00
• C) $16.00
• D) $30.00

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Definitions:

Idle Capacity

The portion of a company's resources or equipment that is not currently in use or producing goods, often leading to inefficiency and increased costs.

Fixed Costs

Costs that do not change with the level of output or sales, such as rent, salaries, and insurance.

Outside Supplier

An outside supplier is a third party that provides goods or services to a company, which are outside of the company's internal production process.

Operating At Capacity

The state of a company utilizing its resources, such as production facilities, at maximum potential without incurring additional capital expenditures.