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

question 70

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. Using ABC as the benchmark, what is the percentage error in the cost assigned to Model G using the approximately relevant ABC approach? (round to 4 decimal places)

• A) 0.25%
• B) 0.12%
• C) 1.2%
• D) 2.5%

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Definitions:

Financial Constraints

Limitations on the availability or use of financial resources, impacting a person's or organization's ability to make decisions or investments.

Computer-Assisted Interviews

The use of computer technology to conduct interviews, including both software that guides the interview process and online platforms for remote interviewing.

Honest Responses

Genuine, truthful answers or feedback provided without deceit or manipulation.

Team Approach

A strategy or methodology that emphasizes collaboration, unity, and shared responsibility among members working towards a common goal.