Hugo, Owner of Automated Fabric, Inc

question 137

Multiple Choice

Hugo, owner of Automated Fabric, Inc., is interested in using the reciprocal allocation method. The following data from operations were collected for analysis:

What is the complete reciprocated cost of the Personnel Department? (Do not round any intermediary calculations.)

• A) $170,000
• B) $208,140
• C) $180,000
• D) $213,012

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Definitions:

Slope

In mathematics and economics, a measure of steepness or incline, often representing the rate of change of a function on a graph.

Cost Driver

A factor that causes a change in the cost of an activity or a product, such as production volume or labor hours.

Activity-based Costing

A methodology that assigns production costs to products based on the activities required to produce them, aiming for more accurate cost allocation.

Volume-based

A pricing or costing method that changes based on the amount of goods or services produced or sold.