Calculate the Total Cost to Meet the Demand Using a Level

question 89

Multiple Choice

Calculate the total cost to meet the demand using a level production plan with overtime. Once overtime is approved the workers are on the job 12 hours each day for the full period. Each unit that cannot be completed with a level product plan costs the firm $150. Assume that the employees can only finish a whole unit and round up/down accordingly.

• A) $72,960
• B) $73,460
• C) $75,870
• D) $76,800
• E) $77,175

---

Definitions:

Batches

Batches refer to a specific quantity of material or products processed or produced at one time in a manufacturing or production process.

Activity Rates

Ratios used to allocate costs to products or services based on the amount of activity consumed by each.

Activity-Based Costing

A pricing technique that allocates expenses to goods or services according to the tasks and materials involved in their creation.

Activity Cost Pools

A costing method that groups all the costs associated with a specific activity, allowing more accurate allocation of costs to products or services.