Use This Information for ABC Corporation to Answer the Questions

question 106

Multiple Choice

Use this information for ABC Corporation to answer the questions that follow.
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ABC Corporation has three service departments with the following costs and activity base:
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ABC has three operating divisions, Micro, Macro and Super. Their revenue, cost and activity information is as follows:
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-What will the income of the Macro Division be after all service department allocations?

• A) $780,000
• B) $375,000
• C) $575,000
• D) $435,000

Understand the crossover rate and its relevance in comparing two investment projects.

Recognize the variability and uncertainty in project outcomes and the limitations of financial analysis tools.

Grasp the concept and importance of net present value (NPV) in project evaluation.

Understand the concept of payback period and its utility in assessing investment decisions.

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Definitions:

Widgets

Widgets are a generic term for small devices or gadgets, or can refer to hypothetical products used in economics or financial examples.

Nonfinancial Performance Measure

A performance measure expressed in units rather than dollars.

Normal Standard

A benchmark or baseline condition expected to be present in a set of data, processes, or operations.

Direct Materials Price Variance

The difference between the actual cost of direct materials and the expected cost at standard prices.