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

question 165

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, using consumption ratios for labor related and batch inspections, the overhead assigned to labor related activities would be? (round to 5 decimal places)

• A) $318,750
• B) $204,000
• C) $306,000
• D) $191,250

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Definitions:

Carbon Atoms

The chemical element with atomic number 6; it is the basic building block of organic molecules and can form four covalent bonds.

Hydrogen Atoms

The simplest atoms consisting of one proton and one electron, fundamental in the composition of water and organic compounds.

Haloalkane

An organic compound in which one or more halogen atoms (fluorine, chlorine, bromine, or iodine) are bonded to the carbon atoms of an alkane.

Alkane Name

A term used to specify the structured naming system for alkanes, characterized by the suffix "-ane" and a prefix denoting the number of carbon atoms.