Sanford Tools Produces a Variety of Scissors and Other Cutting

question 123

Multiple Choice

Sanford Tools produces a variety of scissors and other cutting instruments at its Birmingham manufacturing plant. The plant is highly automated and uses an activity-based costing system to allocate overhead costs to its various product lines. The company expects to produce 24,000 total units during the current period. The costs and cost drivers associated with four activity cost pools are given below: Production of 1,000 units of a pipe-cutting tool required 400 labor hours, 10 setups, and consumed 30% of the product sustaining activities and resulted in an overhead allocation of $15,400. What amount of batch-level overhead costs was expected during the period?
$\begin{array}{|c|c|c|c|c|}\hline \text { ACTIVITIES: } & \text { UNIT } & \text { BATCH } & \text { PRODUCT } & \text { FACILITY } \\\hline & \overline{\text { LEVEL }} & \overline{\text { LEVEL }} & \text { LEVEL } & \text { LEVEL } \\\hline \text { Cost } & \$ 50,000 & ? & \$ 10,000 & \$ 120,000 \\\hline\\\hline \text { river } & 4,000 \text { labor hrs } & 100 \text { set ups } & \% \text { of use } & 24,000 \\\hline\end{array}$

• A)$24,000
• B)$2,400
• C)$12,500
• D)None of these answers is correct.

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Definitions:

Genes

The basic physical and functional units of heredity, made up of DNA, that determine specific characteristics by encoding proteins.

Polygenetic Effects

The influence on a trait that results from the interaction of many different genes.

Dominant Gene Pair

is two alleles of a gene where both are dominant, leading to the dominant trait being expressed in the organism.

Recessive Gene Pair

Two copies of a gene on a chromosome that must both be present for a recessive trait to be expressed.