Adams Company Makes Two Types Of Circuit Boards One Is A High Caliber Board Designed To Accomplish The Most Demanding T 1 (85.31 KiB) Viewed 16 times
Adams 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, Adams incurred $180,000 of inspection cost. Adams recently established an activity-based costing system that classifies its activities into four categories. Categories and appropriate cost drivers follow: High caliber Low caliber Total Direct Labor Number of Batches 20 20 40 Hours 4,000 11,000 15,000 Number of Inspectors 4 2 6 Number of Square Feet 25,000 95,000 120,000 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 $180,000 of inspection cost will be allocated four times, once for each cost driver. Note: Do not round intermediate calculations.
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 $180,000 of inspection cost will be allocated four times, once for each cost driver. Note: Do not round intermediate calculations. (a) Unit-level activities (b) Batch-level activities (c) Product-level activities (d) Facility-level activities Allocated Cost High-Caliber Boards Low-Caliber Boards
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