A Company Identified the Following Partial List of Activities, Costs

question 165

Multiple Choice

A company identified the following partial list of activities, costs, and activity drivers expected for the next year.
$$\begin{array}{l}\begin{array} { | l | c | c | } \hline \text { Activity } & \text { Expected Costs } & \text { Cost Driver } \\\hline \text { Extrusion Costs } & \$ 83,600 & \text { Number batches made } \\\hline \text { Handling Costs } & \$ 8,800 & \text { Number of orders filled } \\\hline \text { Packaging Costs } & \$ 40,500 & \text { Number of units made } \\\hline\\\hline & \text { Product A } & \text { Product B } \\\hline \text { Production volume } & 750,000 \text { units } & 600,000 \text { units } \\\hline \text { Batches made } & 200 \text { batches } & 750 \text { batches } \\\hline \text { Orders filled } & 75 & 200 \\\hline\end{array}\end{array}$$
Calculate activity rates for each of the three activities using activity-based costing (ABC) .

• A) Extrusion: $304 per batch; Handling: $32 per unit; Packaging: $.03 per unit.
• B) Extrusion: $88 per batch; Handling: $32 per order; Packaging: $.03 per unit.
• C) Extrusion: $88 per order; Handling: $32 per unit; Packaging: $.03 per batch.
• D) Extrusion: $418 per batch; Handling: $117.33 per order; Packaging: $.054 per unit.
• E) Extrusion: $118.13 per batch; Handling: $44 per order; Packaging: $.0675 per unit.

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Definitions:

π Bonds

Covalent bonds formed from the sideways overlap of p orbitals, allowing for electron density regions above and below the plane of the atoms.

Bond Dissociation Energies

The amount of energy needed to break a particular bond in a molecule into its constituent atoms in the gas phase.

Sigma Bonds

A bond formed by the direct overlap of atomic orbitals, leading to a covalent bond with electron density concentrated directly between the nuclei.

Pi Bonds

Covalent chemical bonds where two lobes of one involved electron orbital overlap two lobes of the other involved electron orbital, characteristically found in double and triple bonds.