Valpar Company Produces Several Lines of Laundry Hampers A)$2,500
B)$7,500
C)$5,000
D)$6,000

question 150

Multiple Choice

Valpar Company produces several lines of laundry hampers. The factory is highly automated and uses an activity-based costing system to allocate overhead costs to its various products. During the upcoming period the company expects to produce 72,000 units. The costs and cost drivers associated with four activity cost pools are given below: Production of 20,000 units of its popular foldable hamper required 3,000 labor hours, 75 setups, and consumed one-third of the product sustaining activities. What amount of unit-level costs will be allocated to the product?
$\begin{array}{|c|c|c|c|c|}\hline \text { ACTIVITIES: } & \text { UNIT } & \text { BATCH } & \text { PRODUCT } & \text { FACILITY } \\\hline & \overline{\text { LEVEL }} & \text { LEVEL } & \text { LEVEL } & \text { LEVEL } \\\hline \text { Cost } & \$ 30,000 & \$ 8,000 & \$ 15,000 & \$ 36,000 \\\hline\\\hline \text { river } & 12,000 \text { labor } \mathrm{hrs} & 200 \text { set ups } & \% \text { of use } & 72,000 \\\hline\end{array}$

• A)$2,500
• B)$7,500
• C)$5,000
• D)$6,000

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Definitions:

Building

A structure with walls and a roof, such as a house or factory, intended for use or occupancy.

AASB 11

An accounting standard that sets out the financial reporting requirements for entities that have an interest in arrangements that are controlled jointly (joint arrangements).

Joint Control

A situation where the strategic financial and operating policy decisions of a business arrangement are determined by unanimous consent of the parties sharing control.

Unilateral Control

The power exerted by one entity over another without the need for mutual agreement or cooperation.