Skyfire Manufacturing has two departments, Assembly and Testing. You are given the following information about the costs of 4 activities that occur at the manufacturing plant monthly:

\begin{array}{c}\begin{array}{lll}\underline{\text {Activity}}\\\text {Material handling}\\\text {Supervision on of direct labor}\\\text {Maintenance and cleaning}\\\text {Machining}\\\text {Total costs}\end{array}\begin{array}{c}\underline{\text { Total Costs }} \\\$ 100,000 \\105,000 \\150,000 \\\underline{240,000 }\\\underline{\underline{\$ 595,000}} \\\end{array}\begin{array}{c}\underline{\text { Volume of Cost Driver}}\\\text { 200,000 parts}\\\text { 70 employees}\\\text { 3,000 hours}\\\text { 6,000 machine hours}\\\\\end{array}\end{array}

The above activities are used by the two departments as follows:

\begin{array}{lll}&\underline{\text {Assembly}}&\underline{\text {Testing}}\\\text { Material handling } & 150,000 \text { parts } & 50,000 \text { parts } \\\text { Supervision of direct labor } & 30 \text { employees } & 40 \text { employees } \\\text { Time spent cleaning } & 2,000 \text { hours } & 1,000 \text { hours } \\\text { Number of machine hours } & 4,000 \text { machine hours } & 2,000 \text { machine hours }\end{array}

How much of the maintenance and cleaning costs will be allocated to Assembly?
A) $150,000
B) $198,333
C) $100,000
D) $50,000

Which Statement About Costing Systems Is True

Multiple Choice

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