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

question 36

Multiple Choice

Furniture 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:
$\begin{array}{|l|r|}\hline \text { Costs: } & \\\hline \text { Manufacturing overhead } & \$ 600,000 \\\hline \text { Selling and administrative expenses } & \underline{300,000} \\\hline \text { Total } & \$ 900,000\\\hline\end{array}$

$\text { Distribution of Resource Consumption: }$

$\begin{array}{|l|r|r|r|r|}\hline & \text { Order Size } & \begin{array}{r}\text { Customer } \\\text { Support }\end{array} & \text { Other } & \text { Total } \\\hline \begin{array}{l}\text { Manufacturing } \\\text { overhead }\end{array} & 45 \% & 50 \% & 5 \% & 100 \% \\\hline \begin{array}{l}\text { Selling and } \\\text { administrative } \\\text { expenses }\end{array} & 40 \% & 45 \% & 15 \% & 100 \% \\\hline\end{array}$

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 the 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) $75,000.
• C) $80,000.
• D) $120,000.

Recognize the assumptions of a Pearson correlation, including linearity.

Apply the concept of Pearson correlation to real-world examples, understanding the implications of positive, negative, and nonlinear relationships.

Identify the appropriate statistical measures to describe relationships between variables from scatterplots.

Explain how scatterplot shapes correspond to different correlation values.

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Definitions:

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A person or company involved in the process of promoting, selling, and distributing products or services to potential customers.

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An approach by businesses that focuses on creating a positive experience for customers through tailored services and products that meet their needs.

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A method or model used by businesses to set the selling price for their products or services, taking into account factors like cost, competition, target market, and overall business objectives.

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