Nichols Inc. manufactures remote controls. Currently the company uses a plant – wide rate for allocating manufacturing overhead. The plant manager is considering switching - over to ABC costing system and has asked the accounting department to identify the primary production activities and their cost drivers which are as follows: Activities Cost driver Allocation Rate Material handling Number of parts $4 per part Assembly Labor hours $20 per hour Inspection Time at inspection station $10 per minute The current traditional cost method allocates overhead based on direct manufacturing labor hours using a rate of $600 per labor hour. What are the indirect manufacturing costs per remote control assuming an activity – based - costing method is used and a batch of 100 remote controls are produced? The batch requires 420 parts, 9 direct manufacturing labor hours, and 13 minutes of inspection time. ..... O A. $6.00 per remote control B. $34.00 per remote control OC. $1,990.00 per remote control 14 O D. $19.90 per remote control

Nichols Inc. manufactures remote controls. Currently the company uses a plant – wide rate for allocating manufacturing overhead. The plant manager is considering switching - over to ABC costing system and has asked the accounting department to identify the primary production activities and their cost drivers which are as follows: Activities Cost driver Allocation Rate Material handling Number of parts $4 per part Assembly Labor hours $20 per hour Inspection Time at inspection station $10 per minute The current traditional cost method allocates overhead based on direct manufacturing labor hours using a rate of $600 per labor hour. What are the indirect manufacturing costs per remote control assuming an activity – based - costing method is used and a batch of 100 remote controls are produced? The batch requires 420 parts, 9 direct manufacturing labor hours, and 13 minutes of inspection time. ..... O A. $6.00 per remote control B. $34.00 per remote control OC. $1,990.00 per remote control 14 O D. $19.90 per remote control

Name: Nichols Inc. manufactures remote controls. Currently the company uses
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Description: Nichols Inc. manufactures remote controls. Currently the company uses a plant – wide rate for allocating manufacturing overhead. The plant manager is considering switching - over to ABC costing systemand has asked the accounting department to identi

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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