Accola Company Uses Activity-Based Costing

question 54

Multiple Choice

Accola Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A is 1,100 units and of Product B is 700 units. There are three activity cost pools, with estimated costs and expected activity as follows:



-If the materials handling cost is allocated on the basis of direct labor-hours, how much of the total materials handling cost would be allocated to the wall mirrors? (Round off your answer to the nearest whole dollar.)

• A) $6,086
• B) $9,129
• C) $11,618
• D) $3,961

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Definitions:

Long Position

An investment strategy where an investor purchases a security with the expectation that it will rise in value.

Futures Contract

An agreement to buy or sell an asset at a predetermined future date and price.

Clearinghouse

An intermediary entity between buyers and sellers in financial markets that ensures the orderly settlement of trades.

Offset

To counterbalance, compensate, or neutralize the effect of something by applying an opposing force or effect.