2,000 0.000 20 40 11 45,000 100,000 105.000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:5
Thomton Company makes two types of circuit boards. One is a high-caliber board designed to accomplish the most demanding tasks
the other is a low-caliber board designed to provide limited service at an affordable price. During its most recent accounting period,
Thornton incurred $330,000 of inspection cost. Thornton recently established an activity-based costing system that classifies its
activities into four categories Categories and appropriate cost drivers follow
eBook
PHIL
References
High caliber
Low caliber
Total
Direct Laber Number of
Hours
Batches
20
5,000
22,000
10,000
(a) Unit-level activities
(b) Batch-level activities
(c)
Product-level activities
(d) Facility level activities
Required
Allocate the inspection cost between the two products assuming that it is driven by (a) unit-level activities, (b) batch-level activities, (c)
product-level activities, or (d) facility-level activities. Note that each allocation represents a separate alternative. In other words, the
$330,000 of inspection cost will be allocated four times, once for each cost driver. (Do not round Intermediate calculations.)
Allocated Cost
Number of
Inspectors
High-Caliber
Boards
Sumber of
Square Feet
65,000
100,000
165.000
Low-Caliber
Boards
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