Sand Box Company Is Choosing New Cost Drivers for Its

question 58

Multiple Choice

Sand Box Company is choosing new cost drivers for its accounting system. One driver is labor hours; the other is a combination of machine hours for unit variable costs and number of setups for a pool of batch-level costs. Data for the past year follow. $\begin{array}{lrr}&\text { Budget } &\text { Actual }\\\text { Labor hours } & 200,000 & 200,000 \\\text { Machine hours } & 360,000 & 450,000 \\\text { Number of setups } & 3,000 & 3,300 \\\text { Unit variable cost pool } & \$ 1,600,000 & \$ 2,000,000 \\\text { Batch-level cost pool } & \$ 900,000 & \$ 990,000\end{array}$ Assume that the two separate pools are used. The flexible budget dollar amounts for the actual level of machine hours and actual number of setups are:

• A) Choice A
• B) Choice B
• C) Choice C
• D) Choice D
• E) Choice E

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Definitions:

Sale of Goods Act

Legislation that regulates the sale of goods, ensuring rights, obligations, and remedies in commercial transactions, making sure products sold are as advertised and fit for purpose.

Bankruptcy

A legal status of a person or entity that cannot repay the debts it owes to creditors, leading to a legal process aimed at resolving the financial issues under the bankruptcy laws.

Sale of Goods Act

Legislation that governs the sale of goods, ensuring rights, responsibilities, and protections for both buyers and sellers.

Title

The legal right to own, use, or sell property or assets; also refers to the formal document proving such a right.