Kemper Consulting Company Is Headquartered in Little Rock with Offices

question 27

Multiple Choice

Kemper Consulting Company is headquartered in Little Rock with offices in Memphis and Tulsa.All administrative duties are centralized in the Little Rock office.Canterbury's administrative costs are assigned to two activity cost pools, Accounting and Computer, with the costs allocated to the three offices.Estimated data for year are as follows: $\begin{array}{lll}\text { Activity Cost Pool }&\text { Activity Measure }&\text { Estimated Costs }\\\hline\text { Accounting } & \text { Time spent for office }\{\%\} & \$ 70,000 \\\text { Computer } & \text { Time used by office }\{\text { hrs\} } & \$ 25,000\end{array}$

$\begin{array}{lrr}&\text { Time spent }\{\% \text { \} }&\text { Time used (hrs) }\\\hline\text { Little Rock } & 35 \% & 624 \\\text { Memphis } & 40 \% & 1,560 \\\text { Tulsa } & 25 \% & 936\end{array}$ How much of the administrative costs will be allocated to the Memphis office?

• A)$40,500
• B)$47,500
• C)$38,000
• D)$95,000
• E)$70,000

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Definitions:

Determination

Often associated with the coefficient of determination (R-squared), it measures the proportion of variance in the dependent variable predictable from the independent variable(s).

Degrees of Freedom

The number of independent values or quantities that can vary in an analysis without breaking any constraints.

Critical Value

A value that is compared with the test statistic to determine whether H0 should be rejected.

Independent Variables

Factors that are manipulated or changed in an experiment to assess their effects on dependent variables.