Davis Company Uses an Activity-Based Costing System in Which There

question 40

Multiple Choice

Davis Company uses an activity-based costing system in which there are 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 the 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) $80,000.
• D) $120,000.

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Definitions:

Data Rot

The gradual degradation or loss of data quality or integrity over time due to various factors such as obsolescence or storage medium deterioration.

Data Degradation

Refers to the gradual loss of quality or fidelity of data over time or through the process of copying and transferring.

Inconsistency

The state of being in disagreement or lacking uniformity within data, actions, or behaviors.

Database Systems

Software applications designed to store, manage, and retrieve information efficiently from a structured set of data.