The Sit-N-Spin Corporation Manufactures and Assembles Office Chairs

Multiple Choice

The Sit-N-Spin Corporation manufactures and assembles office chairs. Sit-N-Spin uses an activity-based costing system to allocate all manufacturing conversion costs. Each chair consists of 20 separate parts totaling $125 in direct materials, and requires 2.0 hours of machine time to produce. Additional information follows: What is the cost of assembling per chair?

A) $6.00
B) $5.50
C) $30.00
D) $55.00