Augustine Associates Is a CPA Firm That Offers Assurance and Consulting

question 34

Multiple Choice

Augustine Associates is a CPA firm that offers assurance and consulting services. The firm uses an activity-based costing system and has developed the following activity pool cost rates: Cost and activity data related to two clients is as follows: How much overhead cost would be allocated to Client 867 using the activity-based costing system?

• A)$370
• B)$18,290
• C)$5,700
• D)$16,650

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Definitions:

Instrument

A written legal document that officially records a legally enforceable act, process, or contractual obligation, arrangement, or right.

Promissory Note

A legal instrument in which one party promises in writing to pay a determinate sum of money to the other, either at a fixed or determinable future time or on demand of the payee, under specific terms.

Primary Liability

Primary liability pertains to the direct and immediate obligation to fulfil a financial commitment or compensate for a loss.

Negotiable Instrument

A negotiable instrument is a written document guaranteeing the payment of a specific amount of money, either on demand or at a set time, with the payee able to transfer the instrument to another party.