38.A company has two production cost centres and two service cost centres. Productionoverheads have already been allocated and apportioned to the production cost centres withoverheads of $400.000 for cost centre H and $200 000 for cost centre K. Now the service costcentre costs are to be re-apportioned to the production cost centres. The details are asfollows:% overhead apportioned to production cost centre H% overhead apportioned to production cost centre KAllocated and apportioned overheadService costService costCentre PCentre Q25%75%60%40%$100 000$160 000What is the total re-apportionment to production cost centre H?ABCDA ]$121 000[ ]$145 000[ ]$345 000]$521 00039 Which of the following statements are true?Activity based costing (ABC) can only be applied to service industries.II. Many service applications involve high fixed costs and the higher the number of costunits produced, the higher the fixed costs per unitAI onlyBoth I and IIB[ ] II onlyCDNeither I nor II40. A company is developing a new product which has required market research of $120 000. It isestimated that the product will provide revenue of $600 000 during the following year withvariable costs of $300 000 and fixed costs of $200 000.Which of the following costs are not relevant to a decision as to whether to produce thisproduct?A [] $120 000B$200 000C [ ] $300 000$500 000

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38. A company has two production cost centres and two service cost centres. Production overheads have already been allocated and apportioned to the production cost centres with overheads of $400 000 for cost centre H and $200 000 for cost centre K. Now the service cost centre costs are to be re-apportioned to the production cost centres. The details are as follows: % overhead apportioned to production cost centre H % overhead apportioned to production cost centre K Allocated and apportioned overhead Service cost Service cost Centre P Centre Q 25% 60% 75% $100 000 40% $160 000 What is the total re-apportionment to production cost centre H? ABCD A $121 000 [ ] $145 000 [ ] 1] $345 000 $521 000 39 Which of the following statements are true? 1 Activity based costing (ABC) can only be applied to service industries. II. Many service applications involve high fixed costs and the higher the number of cost units produced, the higher the fixed costs per unit ABCD ] [ ] [ ] [ ] I only II only Both I and II Neither I nor II 40. A company is developing a new product which has required market research of $120 000. It is estimated that the product will provide revenue of $600 000 during the following year with variable costs of $300 000 and fixed costs of $200 000 Which of the following costs are not relevant to a decision as to whether to produce this product? ABCO I] [ ] C [ ] [ ] $120 000 $200 000 $300 000 $500 000

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 2PB: The following product costs are available for Kellee Company on the production of eyeglass frames:...