Franklin Manufacturing Manufactures Two Models of Windows, Bay Windows and Casement

question 16

Multiple Choice

Franklin Manufacturing manufactures two models of windows, bay windows and casement windows. Franklin uses an activity based costing system. The following information about the activities used to produce the company's products has been provided.If bay windows and casement windows require the same amount of direct labor, using labor hours as the allocation base for facility-level costs would: Produce
Agree. Change made. JMF
$\begin{array} { | l | c |r | c | c | } \hline { \text { Category } } & { \text { Estimated Cost } } & \text { Cost Driver } & \text { Bay Windows } & \text { Casement } \\\hline \text { Unit-level } & \$ 125,000 & \text { Labor hours } & 750 & 500 \\\hline \text { Batch-level } & \$ 75,000 & \text { Inspections } & 30 & 20 \\\hline \text { Product-level } & \$ 35,000 & \text { Storage Space } & 3500 \text { sq feet } & 2100 \text { sq feet } \\\hline \text { Facility-level } & \$ 165,000 & \text { Machine hours } & 9,000 & 6,000 \\\hline\end{array}$

• A)undercost the casement windows.
• B)overcost the bay windows.
• C)undercost both the bay windows and casement windows.
• D)None of these answers is correct. Produce
• Agree. Change made. JMF

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Definitions:

Effervescence

The process of releasing gas bubbles from a liquid, often seen when opening carbonated drinks.

Specific Gravity

The ratio of the density of a substance to the density of a reference substance, typically water, at a specified temperature.

Volcanic Glass

A natural glass produced by the cooling and solidification of molten lava at a rate too rapid to permit crystallization.

Liquid Water

The liquid phase of H2O, existing at temperatures between 0°C and 100°C under standard atmospheric pressure, and vital for all known forms of life.