Quick Start Engines Has Two Departments, Assembly and Testing

question 98

Multiple Choice

Quick Start Engines has two departments, Assembly and Testing. You are given the following information about the costs of 5 activities that occur at the manufacturing plant monthly: Activity Total Costs Volume of Cost Driver
Material handling $100,000 200,000 parts
Supervision of direct labour 105,000 70 employees
Janitorial and cleaning 150,000 3,000 hours
Machining 240,000 6,000 machine hours
Total costs $595,000
The above activities are used by the two departments as follows:
Assembly Testing
Material handling 150,000 parts 50,000 parts
Supervision of direct labour 30 employees 40 employees
Time spent cleaning 2,000 hours 1,000 hours
Number of machine hours 4,000 machine hours 2,000 machine hours
What is the ABC allocation rate for supervision of direct labour?

• A)$3,500 per employee
• B)$1,500 per employee
• C)$0.50 per part
• D)$50 per hour spent in supervision

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Definitions:

Human Systems Contingency Model

This model suggests that effective organizational management and design depend on fitting the organization's structure and processes to the conditions or context in which it operates.

Behavioural Approach

The behavioural approach in psychology focuses on observing and analyzing the observable and measurable aspects of behavior and the effects of learning and environment on behavior.

Organizations as Communities

The concept that organizations are social entities that reflect the collective behaviors and values of their members.

Harmony

A state of agreement or concord, often characterized by a peaceful and cooperative relationship among individuals or groups.