Assume Porter's Consulting Uses the Number of Purchase Orders as the Cost

question 22

Multiple Choice

Assume Porter's Consulting uses the number of purchase orders as the cost driver for allocating purchasing costs of $285,000.If Porter issues 1,000 purchase orders, including 300 used by line activity one, 400 used by line activity two, 50 for supplies used by purchasing itself, and 250 used by administration, how much of the cost will be allocated to line activity two using the direct method of allocation?

• A)$199,500
• B)$114,000
• C)$162,857
• D)$195,000
• E)None of the above.

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Definitions:

Maslow's Theory

A psychological theory proposed by Abraham Maslow, which suggests that humans are motivated by a hierarchy of needs, starting from basic physical requirements to higher psychological needs, leading to self-actualization.

Achievement Needs

The drive or desire within an individual to accomplish goals and excel, often linked to motivation theory.

Reinforcement Theory

Explains human behavior in terms of repetition. Behavior that is rewarded enough times will be repeated, where behavior that repeatedly receives no reward will probably discontinue.

Goal Setting

The process of identifying something that you want to accomplish and establishing measurable objectives and timeframes.