Kramer Company manufactures coffee tables and uses an activity-based costing system.Each coffee table consists of 20 separate parts totaling $240 in direct materials,and requires 5.0 hours of machine time to produce.Additional information follows:

What is the cost of materials handling per coffee table?
A)$40.00
B)$20.00
C)$7.75
D)$15.00

Question

Kramer Company manufactures coffee tables and uses an activity-based costing system.Each coffee table consists of 20 separate parts totaling $240 in direct materials,and requires 5.0 hours of machine time to produce.Additional information follows:

What is the cost of materials handling per coffee table?

What is the cost of materials handling per coffee table?
A)$40.00 
B)$20.00 
C)$7.75 
D)$15.00

Quizplus · Accepted Answer

A)1 table = 20 parts × $2.00 per part = $40.00

Kramer Company Manufactures Coffee Tables and Uses an Activity-Based Costing