Question 3 GFT Corporation manufactures two sizes of ceramic paperweights, regular and jumbo. The following...
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Accounting
Question 3
GFT Corporation manufactures two sizes of ceramic paperweights, regular and jumbo. The following information applies to their expectations for the planning period:
Cost Pool Overhead Costs Activity-cost driver
Materials handling $46,000 94,000 orders
Machine maintenance $310,000 20,000 maintenance hours
Setups $261,000 45,000 setups
Inspections $132,370 21,700 inspections
Total support costs $749,370
Production Estimates
Production units:
Regular = 8,000,000 units
Jumbo = 16,000,000 units
Machine-hours = 500,000 mh
Labor-hours = 1,000,000 dlh
Expected direct costs amounts to $942,000 for the period. Support cost requirements of both products are substantially different from one another. Corporation uses an ABC costing system. What is the setups activity-cost driver rate?
Group of answer choices
$15.50/setup
$6.10/setup
$4.15/setup
$5.80/setup
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