A Company Incurs $3,600,000 of Overhead Each Year in Three

question 107

Multiple Choice

A company incurs $3,600,000 of overhead each year in three departments: Processing, Packaging, and Testing. The company performs 800 processing transactions, 200,000 packaging transactions, and 2,000 tests per year in producing 400,000 drums of Oil and 600,000 drums of Sludge. The following data are available: $\begin{array}{lcr}\text { Department }&\text {Expected Use of Driver}&\text { Cost }\\\text { Processing } & 800 & \$ 1,500,000 \\\text { Packaging } & 200,000 & 1,500,000 \\\text { Testing } & 2,000 & 600,000\end{array}$

$\text { Production information for the two products is as follows: }$

$\begin{array}{lcc}&\text {Oil }&\text {Sludge }\\\text { Department}&\text { Expected Use of Driver}&\text { Expected Use of Driver }\\\hline\text { Processing } & 300 & 500 \\\text { Packaging } & 120,000 & 80,000 \\\text { Testing } & 1,600 & 400\end{array}$ The amount of overhead assigned to Oil using ABC is

• A) $1,800,000.
• B) $1,942,500.
• C) $1,657,500.
• D) $1,380,000.

Explain the concerns of the Frankfurt School regarding the dominance of instrumental reasoning in modern culture.

Understand the economic rationale behind corporate acquisitions and their reliance on different forms of value.

Define culture from a critical theory perspective, emphasizing lived experiences and interpretations.

Develop critical communication capacities to question conventional assumptions about the world.

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Definitions:

Gross Profit Margin

A financial metric indicating the percentage of revenue that exceeds the cost of goods sold; it measures how efficiently a company uses its labor and supplies in production.

Cost of Goods Sold

Refers to the immediate expenses related to manufacturing products that a business sells.

General and Administrative Costs

Expenses related to the overall administration and management of a business, excluding production and sales costs.

Total Debt Ratio

A financial metric that compares a company's total liabilities to its total assets, indicating what proportion of a company's assets is financed by debt.