Reference: 17_06
Assume That the Oregon Ice Cream Company Is

question 48

Multiple Choice

Reference: 17_06
Assume that the Oregon Ice Cream Company is considering the costs of two of their product lines-ice cream sandwiches and dessert bars. The company identified the following partial list of activities, costs, and activity drivers expected for the next year.
$$\begin{array} { | l | c | c | } \hline \text { Activity } & \text { Expected Costs } & \text { Cost Driver } \\\hline \text { Extrusion costs } & \$ 637,500 & \text { Number batches made } \\\hline \text { Packaging costs } & \$ 44,000 & \text { Number of units made } \\\hline\end{array}$$ $$\begin{array} { | l | c | c | } \hline & \text { Ice Crearn Sandwiches } & \text { Dessert Bars } \\\hline \text { Production volume } & 350,000 \text { urits } & 2 0 0 , 0 0 0 \text { urits } \\\hline \text { Batches made } & 400 \text { batches } & 350 \text { batches } \\\hline\end{array}$$
-Refer to the data in the preceding tables.How much overhead cost will be assigned to the ice cream sandwich product line using activity-based costing (ABC) ?

• A) $340,000
• B) $368,000
• C) $28,000
• D) $850.08
• E) $433,682

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Definitions:

Sales Presentation

A pitch or demonstration given by a salesperson to persuade potential buyers to purchase a product or service.

FAB Selling Technique

A presentation technique stressing features, advantages, and benefits of a product.

Benefit Selling

A sales approach that focuses on communicating the benefits and value of a product or service to the customer, rather than just its features.

Customer Retention

Strategies and activities a business employs to keep its customers engaged and reduce customer turnovers.