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

question 124

Multiple Choice

Figure 4-21 Jones Manufacturing uses an activity-based costing system.The company produces Model X and Model Y.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 X and Y as given in the table below:
Jones Manufacturing wants to implement an approximately relevant ABC system by using the two most expensive activities for cost assignment.
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Refer to Figure 4-21.Under this new approach, which activities would be selected as the cost pools?

• A) materials handling and labor related
• B) labor related and batch inspections
• C) product design and batch inspections
• D) materials handling and central purchasing

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Definitions:

Traditional

Pertains to customs, beliefs, or methods that have been passed down through generations.

Monochronic Time

A cultural concept referring to the preference for doing one thing at a time, emphasizing schedules, punctuality, and a linear sense of time.

Variable

A characteristic, number, or quantity that can be measured or quantified and can vary among individuals or over time.

Multidimensional

Having several dimensions or aspects, which can refer to complex problems, diverse approaches, or objects with multiple variables.