Accola Company Uses Activity-Based Costing

question 36

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 material moves, how much of the total materials handling cost would be allocated to the modular homes? (Round off your answer to the nearest whole dollar.)

• A) $182,325
• B) $170,170
• C) $93,552
• D) $109,395

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Definitions:

Opportunity Cost

The dropping of possible gains that could come from other alternatives when a specific one is chosen.

Production Technology

The methods and processes used to convert inputs into outputs (goods or services).

Corn

A cereal plant that yields large grains, or kernels, set in rows on a cob; widely grown for food, fodder, and biofuel.

Rice

Rice is a staple food grain consumed worldwide, known for its versatility and ability to serve as a primary source of carbohydrate.