The Following Is Taken from Clausen Company's Internal Records of Its

question 14

Multiple Choice

The following is taken from Clausen Company's internal records of its factory with two operating departments. The cost driver for indirect labor is direct labor hours, and the cost driver for the remaining items is number of hours of machine use. Compute the total amount of rent and utilities allocated to Dept. 2 using activity-based costing. $$\begin{array} { l c r } & \text { Direct Labor Hours } & \text { Machine Hours } \\\text { Operating Dept. 1 } & 980 & 9,200 \\\text { Operating Dept. 2 } & 2,100 & 6,000 \\\text { Totals } & 3,080 & 15,200 \\& & \\\text { Factory overhead costs } & &\\\text { Rent and utilities } & & \$ 21,700 \\ \text { Indirect labor } & & 17,300\\\text { Depreciation - Equipment } & &14,000\\\text { Total factory overhead }&& \$ 53,000\end{array}$$

• A) $8,566.
• B) $14,152.
• C) $6,000.
• D) $13,134.
• E) $14,092.

Recognize the incentive mechanism provided by the patent system for the creation of new knowledge.

Understand the significance of established property rights for efficient market operations.

Evaluate the effectiveness of different strategies in managing the utilization of common resources and the protection of public goods.

Understand the fundamental characteristics that define public goods and common resources.

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Definitions:

Unconscionable

Something that is shockingly unfair or unjust, often used in a legal context to describe terms that are extremely one-sided.

Sabbath Laws

Regulations related to the observance of the Sabbath, the day of rest in some religions, affecting business operations, work, and activities on this day.

Blue Laws

Laws designed to restrict or ban certain activities on Sundays, traditionally to encourage observance of a day of worship or rest.

Professional Licenses

Certifications issued by a government or professional body that verify someone's qualification to perform a particular profession.