Multiple Choice
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:
The current traditional cost method allocates overhead based on direct manufacturing labor hours using a rate of $20 per labor hour.
What are the indirect manufacturing costs per remote control assuming an activity-based-costing method is used and a batch of 10 remote controls are produced? The batch requires 100 parts,5 direct manufacturing labor hours,and 3 minutes of inspection time.
A) $2.00 per remote control
B) $63.00 per remote control
C) $35.00 per remote control
D) $630.00 per remote control
Correct Answer:
Verified
Correct Answer:
Verified
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