Business, 26.03.2020 17:42, tayveon122
Evert 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, Evert incurred $540,000 of inspection cost. Evert recently established an activity-based costing system that classifies its activities into four categories. Categories and appropriate cost drivers follow:
Direct Number Number Number
Labor Hours of Batches of Inspectors of Square Feet
High caliber 10,000 35 4 70,000
Low caliber 25,000 35 3 105,000
Total 35,000 70 7 175,000
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 $350,000 of inspection cost will be allocated four times, once for each cost driver.
Answers: 3
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Evert Company makes two types of circuit boards. One is a high-caliber board designed to accomplish...
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