Brisky Corporation Uses Activity-Based Costing to Compute Product Margins

question 88

Multiple Choice

Brisky Corporation uses activity-based costing to compute product margins. In the first stage, the activity-based costing system allocates two overhead accounts-equipment depreciation and supervisory expense-to three activity cost pools-Machining, Order Filling, and Other-based on resource consumption. Data to perform these allocations appear below: In the second stage, Machining costs are assigned to products using machine-hours (MHs) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Finally, sales and direct cost data are combined with Machining and Order Filling costs to determine product margins.


-The activity rate for the Machining activity cost pool under activity-based costing is closest to:

• A)$1.40 per MH
• B)$30.00 per MH
• C)$0.70 per MH
• D)$0.55 per MH

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Definitions:

Distance Cue

Visual indicators that allow a person to perceive depth or distance in their environment, such as texture gradient or aerial perspective.

Depth Perception

the visual ability to perceive the world in three dimensions, allowing for the estimation of distance.

Interposition

A visual cue that helps to perceive depth by determining that objects blocking other objects from view are closer.

Distance Cue

Visual information that helps determine the distance of an object from the observer, aiding in depth perception.