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

question 27

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, what is the new pool rate for labor related costs?

• A) 0
• B) $6
• C) $8.225
• D) $12.75

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Definitions:

Hygiene Model

A concept in organizational behavior that suggests certain factors in the workplace can prevent dissatisfaction but do not necessarily motivate employees.

Job Characteristics Model

A theory that proposes how job design influences motivation, job satisfaction, and productivity by impacting psychological states of employees.

Ethics Competency

The ability to recognize ethical dilemmas, make decisions that reflect moral principles, and behave in a manner consistent with good ethical practices.

Hypothetical Situations

Scenarios or conditions that are imagined or theorized to understand their potential implications or to plan for possible future events.