Sullivan Inc

question 75

Multiple Choice

Sullivan Inc.reports the following information about resources.At the beginning of the year,Sullivan estimated it would spend $180,000 for materials,$42,000 for purchasing,$35,000 for setups,and $36,000 for repairs. Compute unused resource capacity for purchasing for Sullivan.

• A)$5,538.
• B)$2,000.
• C)$4,300.
• D)$2,300.

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Definitions:

Overhead Cost Applied

The method of assigning estimated indirect costs to specific production activities based on a predetermined rate.

Raw Materials

Initial inputs that are processed during manufacturing to produce finished goods.

Requisitions

Official requests or demands for goods, services, or resources, often used in business or governmental operations.

Direct Labor Cost

The salaries given to employees who are directly engaged in manufacturing products or providing services.