Andiamo Manufacturing Produces Two Types of Tablets: Basic and Deluxe

question 135

Multiple Choice

Andiamo Manufacturing produces two types of tablets: basic and deluxe. The tablets are produced using one continuous process. Four activities have been identified: machining, setups, receiving, and packing. Resource drivers have been used to assign costs to each activity. The overhead activities, their costs, and the other related data are as follows:
$$\begin{array} { l r r r r } \text { Product } & \text { Machine Hours } & \text { Setups } & \text { Receiving Orders } & \text { Packing Orders } \\\text { basic } & 20,000 & 200 & 100 & 800 \\\text { deluxe } & 20,000 & 500 & 400 & 4,000 \\\text { Costs } & \$ 80,000 & \$ 60,000 & \$ 10,000 & \$ 30,000\end{array}$$
-Refer to the Figure.Suppose Andiamo uses only machine hours to calculate a plantwide overhead rate.What would be the total overhead assigned to the basic tablets?

• A)$60,000
• B)$80,000
• C)$90,000
• D)$180,000

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Definitions:

Value Chain

A business model that describes the full range of activities needed to create a product or service, from raw materials to final delivery to consumers.