Assume That the Oregon Ice Cream Company Is Considering the Costs

question 66

Multiple Choice

Assume that the Oregon Ice Cream Company is considering the costs of two of their product lines - ice cream sandwiches and dessert bars. The company identified the following partial list of activities, costs, and activity drivers expected for the next year.
$$\begin{array}{l}\begin{array} { | l | c | c | } \hline \text { Activity } & \text { Expected Costs } & \text { Cost Driver } \\\hline \text { Extrusion Costs } & \$ 637,500 & \text { Number batches made } \\\hline \text { Packaging Costs } & \$ 44,000 & \text { Number of units made } \\\hline\end{array}\\\\\begin{array} { | l | c | c | } \hline & \text { Ice Cream Sandwiches } & \text { Dessert Bars } \\\hline \text { Production volume } & 350,000 \text { units } & 200,000 \text { units } \\\hline \text { Batches made } & 400 \text { batches } & 350 \text { batches } \\\hline\end{array}\end{array}$$
-Refer to the data above. How much overhead cost will be assigned to the desert bar product line using activity-based costing (ABC) ?

• A) 340,750
• B) $247,818
• C) $16,000
• D) $297,500
• E) $313,500

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Definitions:

Amount of the Claim

The total sum of money that is being requested or is due in a billing or legal claim.

Custom in the Trade

Established practices and standards widely recognized and accepted within a particular industry.

Judicial Remedy

Legal means through which a court enforces a right, imposes a penalty, or makes another court order to impose its will.

Execution

Execution refers to the carrying out of a plan, order, or course of action to its completion.