Question

24. For a company using arti...- 20. The following estimated overhead cost information is available for Michaels Company for the most recent year. Activity Allocation base Overhead cost Purchasing Number of purchase orders $400,000 Receiving Number of shipments received $210,000 Machine Setups Number of setups $320,000 Quality Control Number of inspections $ 90,000 The company anticipates the following activity levels during the year: 5,000 purchase orders issued: 7,000 shipments received; 80,000 machine setups performed; and 9,000 inspections conducted What is the overhead rate for the quality control activity? a $10 b. $80 c. $7 d. $4 e. None of the answer choices is correct. 21. Which of the following items is a unit-level activity? a. Purchase requisitions issued for raw materials needed to produce groups of products. b. Direct labor assembling products. c. Maintenance performed on the factory building- d. Quality inspections of groups of products. e. None of the answer choices is correct. 22. Flannery Inc, produces identical tables in large batches. Which of the following would most likely be a product-level cost for Flannery? a. Quality control costs. b. Salaries for purchasing and receiving personnel. c. Research and development for a new line of tables. d. Electricity costs for plant machinery. e. None of the answer choices is correct.

Answer 1

20) The answer is A $10

Overhead rate for quality control = Total overheads / Number of inspections = $9000 / 9000 = $10

21) The correct answer is B

Direct labor costs are directly assigned to the workers on unit basis as wages are paid to them on per unit basis or on number of hours basis.