Benitez Company Makes Wicker and Wooden Slat Picnic Baskets

question 73

Multiple Choice

Benitez Company makes wicker and wooden slat picnic baskets.It requires approximately one hour of labor to make one basket of either type.Wicker baskets are produced in batches of 100 units and require 0.5 machine hours per basket.Wooden slat baskets are produced in batches of 50 units and require 0.75 machine hours per basket.Setup is required for each batch.During the most recent accounting period,the company made 8,000 wicker baskets and 2,000 wooden slat baskets.Setup costs amounted to $24,000 for the baskets produced during the period.If activity-based costing is used to allocate overhead costs to the two products,the amount of setup cost assigned to the wicker baskets will be:

• A) $17,455.
• B) $19,200.
• C) $12,000.
• D) $16,000.

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Definitions:

Resource Suppliers

Entities or individuals that provide the essential materials, equipment, or services required by an organization to conduct its operations.

Strategic Management

The process of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives.

Future Planning

The process of setting goals and outlining strategies and actions to achieve those goals, considering predictions about future conditions and challenges.

Unrelated Diversification

A growth strategy where a business expands into areas that are different from its core operations.