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

question 75

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:
$\begin{array} { | l | r | } \hline \text { Costs: } & \\\hline \text { Manufacturing overhead } & \$ 360,000 \\\hline \text { Selling and administrative expenses } & \underline { 240,000 } \\\hline \text { Total } & \$ 600,000 \\\hline\end{array}$

$\text { Distribution of Resource Consumption: }$
$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$$\text { Activity Cost Pools }$$\begin{array} { |l | r | r | r | r | } \hline & \text { Order Size } & \begin{array} { r } \text { Customer } \\\text { Support }\end{array} & \text { Other } & \text { Total } \\\hline \begin{array} { l } \text { Manufacturing } \\\text { overhead }\end{array} & 25 \% & 65 \% & 10 \% & 100 \% \\\hline \begin{array} { l } \text { Selling and } \\\text { administrative } \\\text { expenses }\end{array} & 60 \% & 20 \% & 20 \% & 100 \% \\\hline\end{array}$ 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,would be allocated in the first-stage allocation to the Customer Support activity cost pool?

• A) $120,000.
• B) $255,000.
• C) $282,000.
• D) $390,000.

---

Definitions:

Confidence Interval

A range of values, derived from sample data, that is likely to include the true population parameter with a specified level of confidence.

Population Proportions

Population proportions represent the fraction of individuals in a population that belong to a specified category or exhibit a particular attribute.

Z-value

A measure of how many standard deviations an element is from the mean; often used in statistical analysis to determine significance levels.

Population Proportion

The fraction or percentage of a total population that exhibits a particular characteristic or attribute.