It Costs $2

question 43

Multiple Choice

It costs $2.75 to play a dice game at the fair. The player rolls two standard dice and forms a proper fraction with the two numbers that are rolled. If the number represented by the fraction is in simplest form the player wins, if it is reducible he loses. How much should a winning roll pay out in order to make the game fair? Note: Fractions such as 2/2 are reducible to whole numbers.

• A) $2.75
• B) $4.50
• C) $1.75
• D) $5.25
• E) $1.64

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Definitions:

Activity Cost Pools

Aggregations of all the costs associated with particular activities, used in activity-based costing.

Expected Activity

The anticipated level of operations or output, often used in budgeting and planning.

Predetermined Overhead Rate

A calculated estimate used for allocating overhead costs to products or services, based on an established measure such as labor hours or machine usage, facilitating budgeting and financial planning.

Activity-Based Costing

A strategy for attributing overhead and indirect expenditures to associated services and products, determined by the activities demanded by each.