Table 17-6

question 198

Multiple Choice

Table 17-6. The table shows the demand schedule for a particular product.

-Refer to Table 17-6.Suppose the market for this product is served by two firms that have formed a cartel.What price will the cartel charge in this market if the marginal cost of production is $0?

• A) $6
• B) $8
• C) $10
• D) $12

---

Definitions:

Activity-Based Costing

A method of accounting that identifies the activities a firm performs and assigns costs to those activities based on their use of resources, aiming to better understand business processes and costs.

Two-Stage Allocation Process

A method used in cost accounting to assign indirect costs to products or services, involving an initial allocation to departments and a subsequent allocation to specific products or services.

Cost of Activities

The expenses related to specific activities or projects within a company.

Support Department Cost Allocations

The distribution of overheads and expenses from support departments to operational departments based on criteria reflecting their use of support services.