A Company Produces Computer Chips Which Go Through Two Operations

question 78

True/False

A company produces computer chips which go through two operations, operation A1 and operation B2, before they are complete. Expected costs and activities for the two departments are shown below. Departmental overhead rates are based on machine hours in department A1 and direct labor hours in department B2. Therefore, the overhead rates for department A1 and department B2 are $3.62 per machine hour and $5.73 per direct labor hour, respectively.
$$\begin{array} { l c c } & \text { Department } & \text { Department } \\& \mathrm { A } 1 & \mathrm {~B} 2 \\\text { Machine hours } & 40,000 \mathrm { MH } & 30,000 \mathrm { MH } \\\text { Direct labor hours } & 36,200 \mathrm { DLH } & 28,650 \mathrm { DLH } \\\text { Overhead costs } & \$ 144,800 & \$ 171,900\end{array}$$

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Definitions:

Ground Meristem

The part of a plant embryo that develops into the ground tissue of the plant, which includes the cortex and pith.

Procambium

A primary meristematic tissue in plants, which differentiates into vascular tissues (xylem and phloem).

Primary Xylem

The part of the xylem (the vascular tissue in plants that conducts water and dissolved nutrients upward from the root) that forms first, mainly in seedlings and young plants.

Secondary Xylem

The part of a plant that contributes to the growth of stem thickness and acts as a conduit for water and nutrients.