CAF-5 · Chapter 3 · Question 9 of 10
A factory has total set-up costs of Rs. 24,000. The factory manufactures three products: X, Y, and Z. The number of set-ups required during the period were 20 for Product X, 40 for Product Y, and 20 for Product Z. What amount of set-up cost should be charged to Product Y?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Rs. 12,000
Explanation
Total number of set-ups for the factory = 20 + 40 + 20 = 80 set-ups. Product Y requires 40 set-ups. Product Y's allocation = (40 / 80) × Rs. 24,000 = Rs. 12,000.
More Activity Based Costing MCQs
- Q1Under Activity-Based Costing (ABC), which of the following is the most appropriate cost driver for apportioning "Materials handling /…
- Q2Which of the following best describes the primary difference between Activity-Based Costing (ABC) and traditional overhead absorption?
- Q3According to the study text, what is the most appropriate cost driver for allocating "Quality Control / Quality Inspection cost"?
- Q4A manufacturing company incurs a total "Machining cost pool" of Rs. 36,000. If the total machine hours utilized during the period are…
- Q5Which of the following is the correct cost driver to allocate "Production scheduling cost"?