Figure 4-21
Appleby Manufacturing uses an activity-based costing system. The company produces Model F and Model G. Information relating to the two products is as follows:
The following overhead costs are reported for the following activities of the production process:
Jones manufacturing has used activity based costing to assign costs to Models F and G as given in the table below:
Appleby Manufacturing wants to implement an approximately relevant ABC system by using the two most expensive activities for cost assignment.
-Refer to Figure 4-21. Under the equally accurate reduced ABC system, what are the global consumption ratios for Model F and Model G respectively? (round to 2 decimal places)
A) 0.41: 0.59
B) 0.44; 0.56
C) 0.40; 0.60
D) 0.50; 0.50

Question

Figure 4-21
Appleby Manufacturing uses an activity-based costing system. The company produces Model F and Model G. Information relating to the two products is as follows:
  The following overhead costs are reported for the following activities of the production process:
  Jones manufacturing has used activity based costing to assign costs to Models F and G as given in the table below:
  Appleby Manufacturing wants to implement an approximately relevant ABC system by using the two most expensive activities for cost assignment.
-Refer to Figure 4-21. Under the equally accurate reduced ABC system, what are the global consumption ratios for Model F and Model G respectively? (round to 2 decimal places)
A) 0.41: 0.59 
B) 0.44; 0.56 
C) 0.40; 0.60 
D) 0.50; 0.50

Quizplus · Accepted Answer

Model F's consumption ratio is 0.41 and Model G's consumption ratio is 0.59 under the equally accurate reduced ABC system.

Figure 4-21 Appleby Manufacturing Uses an Activity-Based Costing System. the Company Produces