Figure 4-21 Appleby Manufacturing Uses an Activity-Based Costing System

question 51

Multiple Choice

Figure 4-21 Appleby Manufacturing uses an activity-based costing system. The company produces Model F and Model G. Information relating to the two products is as follows: The following overhead costs are reported for the following activities of the production process:
Jones manufacturing has used activity based costing to assign costs to Models F and G as given in the table below:
Appleby Manufacturing wants to implement an approximately relevant ABC system by using the two most expensive activities for cost assignment.
Refer to Figure 4-21. Under this new approach using the new rates, what are the overhead costs assigned to Model G in this approximately relevant ABC system?

• A) $120,000
• B) $208,250
• C) $255,000
• D) $301,750

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Definitions:

Personal Selling

A direct, one-on-one form of selling in which a salesperson uses skills and techniques to persuade a buyer to purchase a product or service.

Time

The ongoing sequence of events and the resource that can be managed, spent, saved, or wasted in activities or processes.

Extended Credit

A financial arrangement that allows a customer to purchase goods or services on account, paying for them at a later date.

Collection System

A process or network designed for gathering and transporting something, often used in the context of waste collection or receivables in finance.