Wake Construction Wake Construction Manufactures and Installs Standard and Custom-Made

question 30

Multiple Choice

Wake Construction Wake Construction manufactures and installs standard and custom-made cabinetry for residential homes. Last year, the company incurred $200,000 in overhead costs. After implementing activity-based costing (ABC) , the company's accountant identified the following related information:
The number of activities for standard and custom-made cabinets is as follows:
During the past year, Wake accepted a customer order for a set of custom-made cabinets that would require the following:
Refer to the Wake Construction information above. How much overhead should be applied to the above customer order?

• A) $4,050
• B) $285
• C) $3,360
• D) $975

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Definitions:

AFC Curve

A graph representing Average Fixed Costs, which shows how fixed costs per unit of output decrease as production increases.

Total Cost Function

An equation that expresses the total cost of producing a given quantity of output, considering both fixed and variable costs.

Average Total Cost

The total cost of production divided by the number of units produced, signifying the cost per unit of output.

Average Fixed Cost

The total fixed costs of production divided by the number of units produced, showing the fixed cost per unit.