Franklin Manufacturing Manufactures Two Models of Windows,bay Windows and Casement

question 82

Multiple Choice

Franklin Manufacturing manufactures two models of windows,bay windows and casement windows.Franklin uses an activity-based costing system.The following information about the activities used to produce the company's products has been provided. $$\begin{array} { l c c c c } \text { Category } & \text { Estimated Cost } & \text { Cost Driver } & \text { Bay Windows } & \text { Casement } \\\text { Unit-level } & \$ 125,000 & \text { Labor hours } & 750 & 500 \\\text { Batch-level } & \$ 75,000 & \text { Inspections } & 30 & 20 \\\text { Product-level } & \$ 35,000 & \text { Storage Space } & 3 , 5 0 0 \text { sq feet } & 2,100 \text { sq feet } \\\text { Facility-level } & \$ 165,000 & \text { Machine hours } & 9,000 & 6 , 0 0 0 \end{array}$$ The amount of batch-level cost that should be allocated to the bay windows equals:

• A) $30,000.
• B) $45,000.
• C) $75,000.
• D) $7,500.

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Definitions:

Debit

An accounting entry that increases asset or expense accounts, or decreases liability, equity, or revenue accounts.

Credit

An accounting entry on the right side of an account ledger, recording increases in liabilities, equity, and revenue, or decreases in assets and expenses.

Recording Process

The act of documenting financial transactions systematically in the books of accounts of a business.

Journal

An elaborate log that captures every financial transaction of an enterprise, initially entered prior to its transfer to the accounts within the general ledger.