A Company Has Identified the Following Overhead Costs and Cost

question 61

Multiple Choice

A company has identified the following overhead costs and cost drivers for the coming year: (CIA adapted) Budgeted direct labor cost was $100,000 and budgeted direct material cost was $280,000.The following information was collected on three jobs that were completed during the year: The company prices its products at 140% of cost.If the company uses activity-based costing (ABC) ,the price of each unit of Job 103 would be

• A)$98.
• B)$100.
• C)$116.
• D)$140.

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Definitions:

Price Of Capital

The cost of using capital goods in production, which includes interest rates paid on loans or the rate of return required by investors on capital.

Price Of Labor

The wage or compensation given to workers for their labor, often determined by skill level, demand, and market conditions.

Isocost

A line representing all combinations of inputs that can be purchased for the same total cost, given input prices.

Total Expenditures

The sum of all spending incurred by individuals, firms, or the government within a specific period.