Aunt Lucy’s Candies
Aunt Lucy’s Candies Sells Standard and Premium

question 10

Multiple Choice

Aunt Lucy’s Candies
Aunt Lucy’s Candies sells standard and premium chocolate confectionary through its catalogue business. Many of the confectionary are sold in bulk to other companies. Last year, the company incurred $300 000 in overhead costs. After implementing activity-based costing (ABC) , the company’s controller identified the following information:
$$\begin{array} { l l c } \text { Activity } & \text { Allocation Base } & \text { Proportion of Overhead Cost } \\\hline \text { Purchasing } & \text { Number of purchase orders } & 30 \% \\\text { Processing } & \text { Number of units } & 50 \% \\\text { Sales } & \text { Number of sales orders } & 20 \%\end{array}$$
The number of activities for standard and premium confectionary is as follows:
$\begin{array}{lrr}&\underline{\text { Standard} } &\underline{ \text { Premium }} \\\text {Number of purchase orders}&4000& 2000 \\\text { Number of units }&200000 & 100000 \\\text {Number of sales orders}&3000 & 1000\end{array}$
-What is the overhead rate for the sales activity?

• A) $15.00
• B) $ .13
• C) $12.00
• D) $ 1.00

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Definitions:

Rhetorical Analysis

Examines how authors use persuasion in texts or speeches through the study of rhetoric devices, strategies, and appeals.

Semiotics

The study of signs and symbols, their interpretation, and their use in communication.

Signs and Meaning

The study of how signs (anything that represents something else) convey meaning, both in language and in other forms of communication.

Narrative Analysis

The study of the formal properties of stories that people tell. It generally attempts to identify such aspects as plot, setting, characters, and order of events.