value: 4.00 points TB MC Qu. 4-39 Linden, Inc. uses a... Linden, Inc. uses a 5,6

Question

value: 4.00 points TB MC Qu. 4-39 Linden, Inc. uses a... Linden, Inc. uses a 5,650 square foot factory space that it rents for $2,750 a month for all its manufacturing activities. Linden has decided to switch to an activity-based costing system, and has identified its activities as follows: Preparation and Setup, Machining, Finishing, and Quality Control. 3,400 square feet of the factory are used for machining, while 900 square feet (each) are used for pool? Preparation and Setup and Quality Control. Finishing uses 450 square feet. When assigning indirect costs to each activity, how much factory rent should be assigned to the Preparation and Setup cost O $900 O $1,800 O $225 O $438

Explanation / Answer

Calculate factory rent allocated to prepration and setup cost pool ;

Cost allocated to preparation and setup cost pool = 2750/5650*900 = 438

so answer is d) $438

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