The Ruling Company Assigns Plant Administration Costs to the Production

question 141

Multiple Choice

The Ruling Company assigns plant administration costs to the production departments based on the number of employees. Which of the following would NOT be a good combination of common costs with an activity driver?

• A)personnel department costs based on number of employees
• B)purchasing department costs based on machine hours
• C)cafeteria costs based on meals served
• D)warehouse costs based on the value of materials stored

---

Definitions:

Stereotyping

A cognitive process where individuals assign identical attributes to all members of a group, regardless of the actual variation among the members.

Social Loafing

A phenomenon in group settings where individuals reduce their effort because they believe other members of the group will compensate.

Cognitive Dissonance

A psychological discomfort experienced when holding two or more conflicting cognitions (beliefs, attitudes, or values).

Making Attributions

The process of explaining one's own behavior and the behavior of others by assigning causes to these behaviors.