1) Hammock Company manufactures two models of its hammock, the Superior and the Deluxe

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1) Hammock Company manufactures two models of its hammock, the Superior and the Deluxe. The Superior model requires 10,000 direct labour hours and the Deluxe requires 40,000 direct labour hours. The company produces 4,000 units of the Superior model and 1,000 units of the Deluxe model each year. The company produces the Superior model in batch sizes of 200, while it produces the Deluxe model in batch sizes of 100. The company expects to incur $120,000 of total setup costs this year. How much of the setup costs are allocated to the Superior model using ABC costing

$80,000

$60,000

$24,000

$100,000

2)  A)Sunland Company manufactures two models of its hammock, the Superior and the Deluxe. The Superior model requires 10000 direct labour hours and the Deluxe requires 39700 direct labour hours. The company produces 4200 units of the Superior model and 1000 units of the Deluxe model each year. The company produces the Superior model in batch sizes of 200, while it produces the Deluxe model in batch sizes of 100. The company expects to incur $124000 of total setup costs this year. How much of the setup costs are allocated to the Superior model using ABC costing?

B)activity-based costing normally allocates overhead costs

to products only.

more accurately than traditional costing systems.

to services, where as traditional costing systems normally allocate overhead costs to products.

based on no more than three cost drivers.

C)

Which of the following is a product-level activity?

Regulatory approval of a new prescription drug.

An advertisement campaign that focuses on the large number of products the company produces.

Equipment cleaning between batches.

Material handling.