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

question 32

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 the equally accurate reduced ABC system, what are the global consumption ratios for Model F and Model G respectively? (round to 2 decimal places)

• A) .41: .59
• B) .44; .56
• C) .40; .60
• D) .50; .50

Gain insights into various accounting principles, including why adjustments are necessary for accurate financial reporting.

Understand the structured process of making adjusting entries.

Recognize the effects of accrued revenues and expenses on cash flows and financial statements.

Calculate and interpret key financial ratios such as return on assets, debt ratio, and profit margin.

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Definitions:

Harmonized Sales Tax

A combined tax that includes both federal and provincial sales taxes, applied to the purchase of goods and services.

Price Tags

Labels or stickers on merchandise displaying the price of the item.

Implied Value

The estimated value of an asset or company after considering factors not directly stated but suggested by available information.

Annual Dues

Annual dues are yearly fees paid by members to belong to an organization, club, or group, often providing access to benefits or services.