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

question 28

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,should NOT be allocated to orders and customer support 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.

---

Definitions:

Radical Behaviorism

A perspective in psychology, advanced by B.F. Skinner, that views behavior as a subject of natural science without recourse to inner psychological events.

Computer Competence

The ability to use computers effectively and efficiently, including understanding hardware, software, and internet functionalities.

Skinner's Explanation

Refers to B.F. Skinner's behaviorist theory, which emphasizes the role of environmental factors in shaping behavior through reinforcement and punishment.

External Factors

Elements outside an individual, such as environmental, social, or economic forces, that can influence thoughts, behaviors, and outcomes.