Dideda Company Uses an Activity-Based Costing System with Three Activity

question 94

Multiple Choice

Dideda Company uses an activity-based costing system with three activity cost pools. The company has provided the following data concerning its costs and its activity-based costing system:


The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs. You have been asked to complete the first-stage allocation of costs to the activity cost pools.
-How much cost,in total,should NOT be allocated to orders and products in the second stage of the allocation process if the activity-based costing system is used for internal decision making?

• A) $0.
• B) $60,000.
• C) $84,000.
• D) $120,000.

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Definitions:

Dividend Yield

A financial ratio that shows how much a company pays out in dividends each year relative to its share price.

Debt-to-equity Ratio

A financial ratio highlighting the use of debt versus equity in the capital structure supporting a company's assets.

Times Interest

A financial ratio indicating how many times a company can cover its interest payments with its earnings before interest and taxes.

Earnings Per Share

A financial metric that measures the profitability of a company by dividing its net income by the number of outstanding shares of its common stock.