Figure 4-16 Newman Company Recently Installed an Activity-Based Relational Database

question 82

Multiple Choice

Figure 4-16 Newman Company recently installed an activity-based relational database.Using the information contained in the activity relational table, the following pool rates were computed:
$400 per purchase order
$24 per machine hour, Process 1
$30 per machine hour, Process 2
$80 per engineering hour
Two products are produced by Special Products: X and Y.The plant has two manufacturing processes, Process 1 and Process 2.Other processes include engineering, product handling, and procurement.Product X goes through Process 1 while Product Y goes through Process 2.The product relational table for Special Products is as follows:

- Refer to Figure 4-16.How much machine overhead cost will be assigned to Product X using Process 1?

• A) $2,400,000
• B) $4,800,000
• C) $1,920,000
• D) $240,000

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Definitions:

Skimming Strategy

A pricing strategy in which a company charges the highest initial price that customers will pay and then gradually lowers the price to attract more price-sensitive customers.

Product Life Cycle

A concept that describes the stages a product goes through from development to withdrawal from the market, including introduction, growth, maturity, and decline.

Innovative Product

A product that introduces new features, functionality, or improvements that distinctly set it apart from previous versions or competitors.

Positioning Statements

Key messages that are communicated to the target market to differentiate a brand or product in the market and influence consumer perceptions.