Beartowne Enterprises uses an activity-based costing system to assign costs in its auto-parts division. The following units were produced in December with the following information:
Total manufacturing costs for Part 001 is
A)$4,625.
B)$1,500.
C)$7,125.
D)$4,000.

Question

Beartowne Enterprises uses an activity-based costing system to assign costs in its auto-parts division.  The following units were produced in December with the following information:
 Total manufacturing costs for Part 001 is
A)$4,625. 
B)$1,500. 
C)$7,125. 
D)$4,000.

Quizplus · Accepted Answer

According to the table, the total cost driver for Part 001 is 125 machine-hours, and the total cost assigned to this part is $7,125. Therefore, the correct answer is C.

Beartowne Enterprises Uses an Activity-Based Costing System to Assign Costs