Exhibit 14.8 The Following Questions Use the Information Below

question 95

Multiple Choice

Exhibit 14.8
The following questions use the information below.
A company needs to buy a new insurance policy. They have three policies to choose from, A, B and C. The policies differ with respect to price, coverage and ease of billing. The company has developed the following AHP tables for price and summary. The other tables are not shown due to space limitations.
-A circular node in a decision tree is called a(n) ____ node.

• A) chance
• B) random
• C) decision
• D) event

Understand the difference between assigning costs to products and not assigning costs.

Determine the percentage of total overhead cost allocated to specific products.

Understand the principles of Activity-Based Costing (ABC).

Calculate activity rates for various cost pools in an ABC system.

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