Walterboro, Inc

question 6

Multiple Choice

Walterboro, Inc., has done a cost analysis for its production of decals. The following activities and cost drivers have been developed: Activity Cost Formula
Maintenance $11,000 + $0.11 per machine hour
Machining $25,000 + $0.50 per machine hour
Setups $50 per batch
Purchasing $200 + $45 per purchase order
Following are the actual costs of producing 85,000 decals: 5,000 machine hours; 10 batches; 20 purchase orders
What is the budgeted cost per decal? (Round to three decimal places.)

• A) $0.468
• B) $0.478
• C) $0.486
• D) $0.487

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Definitions:

Reasonable Assurance

A concept in auditing that suggests although not absolute, there is a high level of confidence in the financial statements accuracy.

Control Activities

Procedures and policies that are implemented by an entity to ensure that its directives are carried out, including safeguarding assets and preventing and detecting errors and fraud.

Errors And Fraud

Incorrect entries or intentional misstatements in financial statements, often leading to incorrect financial reporting.

Control Activity

Actions, policies, and procedures that are implemented to address risks and help ensure that management's directives are carried out.