Use the Information Below to Answer the Following Question(s)

question 126

Multiple Choice

Use the information below to answer the following question(s) .Fran Ferry Company had the following activities, pooled costs, and physical flow of driver units.The company uses activity-based costing. The above activities are used by departments A and B as follows:

-How much of the account billing cost will be assigned to Department B?

• A)$7,000
• B)$14,000
• C)$46,667
• D)$93,333
• E)$140,000

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Definitions:

Equivalent Units

A concept in cost accounting used to allocate costs to partially completed goods, measured in terms of the amount of finished goods those partial items represent.

Weighted Average Method

A cost accounting method that calculates the cost per unit of inventory by considering the weight of each period’s inventory cost.

Weighted Average Method

An inventory costing method that assigns an average cost to each unit in inventory, calculated by dividing the total cost of goods available by the total units available.

Equivalent Units

A term used in cost accounting to represent a partial completion of a product, measured in units of a fully completed product.