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

question 146

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. $$\begin{array} { l c c c c } \text { Category } & \text { Estimated Cost } & \text { Cost Driver } & \text { Bay Windows } & \text { Casement } \\\text { Unit-level } & \$ 125,000 & \text { Labor hours } & 750 & 500 \\\text { Batch-level } & \$ 75,000 & \text { Inspections } & 30 & 20 \\\text { Product-level } & \$ 35,000 & \text { Storage Space } & 3 , 5 0 0 \text { sq feet } & 2,100 \text { sq feet } \\\text { Facility-level } & \$ 165,000 & \text { Machine hours } & 9,000 & 6 , 0 0 0 \end{array}$$ If bay windows and casement windows require the same amount of direct labor,using labor hours as the allocation base for facility-level costs would:

• A) Undercost the casement windows.
• B) Overcost the bay windows.
• C) Undercost both the bay windows and casement windows.
• D) None of these answers are correct.

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Definitions:

Interactive Exchanges

Dynamic communications or transactions between individuals or entities that involve mutual or reciprocal actions.

Proactive

Taking initiative by acting in advance of future situations rather than just reacting to them.

Evaluating Behavior

The process of assessing the appropriateness, effectiveness, and outcomes of behaviors in specific contexts, often to inform interventions or strategies.

Reactive

Responding to stimuli or events after they have occurred, as opposed to taking initiative or acting in anticipation.