Laredo Manufactures Nuts and Bolts from a Joint Process (Cost

question 5

Multiple Choice

Laredo manufactures Nuts and Bolts from a joint process (cost = $80,000) . Five thousand pounds of Nuts can be sold at split-off for $20 per pound; ten thousand pounds of Bolts can be sold at split-off for $15 per pound. For product costing purposes Laredo allocates joint costs using the relative sales value method.
The amount of joint cost allocated to Bolts would be:

• A) $32,000.
• B) $40,000.
• C) $48,000.
• D) $60,000.
• E) $80,000.

Identify the distribution of resource consumption across activity cost pools.

Understand the principles and application of time-driven activity-based costing.

Perform Customer Cost Analysis using time-driven activity-based costing.

Perform Capacity Analysis using time-driven activity-based costing to evaluate expense impacts of matching capacity with demand.

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Definitions:

Quality Decision

A decision that effectively addresses the problem or opportunity at hand, meets the needs and expectations of stakeholders, and is made based on a thorough analysis and consideration of relevant information.

Timely Decision

The process of making decisions within a timeframe that allows the decision to have its intended effect or value.

Commitment

The condition of being committed or devoted to a purpose, task, or objective.

Minority Domination

A situation in decision-making processes where a smaller group or individual exerts disproportionate influence over the majority.