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

question 74

Multiple Choice

Use the information below to answer the following question(s) :
Kepple Manufacturing currently uses a traditional costing system. The company allocates overhead to its two products, Zips and Dees, using a predetermined manufacturing overhead rate based on direct labour hours. Here is data related to the company's two products:
Information about the company's estimated manufacturing overhead for the year follows:
Additional information about production needed for the activity-based costing system follows:
Expected Activity

-The amount of manufacturing overhead that would be allocated to one unit of Zips using an activity-based costing system would be closest to

• A) $32.86.
• B) $51.12.
• C) $64.81.
• D) $11.95.

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Definitions:

Fiscal Period

A specific time period for which a company prepares financial statements, typically a year or quarter.

Adjusted Trial Balance

A list of all accounts and their final balances after adjustments, used to prepare financial statements.

Income Summary Account

A temporary account used to accumulate all income and expense accounts before transferring the net amount to retained earnings at the end of an accounting period.

Retained Earnings

The portion of net earnings not distributed as dividends to shareholders, but retained by the company to be reinvested in its core business or to pay debt.