Founder Consulting Corporation Has Its Headquarters in Memphis and Operates

question 25

Multiple Choice

Founder Consulting Corporation has its headquarters in Memphis and operates from three branch offices in Nashville, Atlanta, and Louisville. Two of the company's activity cost pools are Administrative Service and Development Service. These costs are allocated to the three branch offices using an activity-based costing system. Information for next year follows: $$\begin{array} { l l l } \text { Activity Cost Pool } & \text { Activity Measure } & \text { Estimated Cost } \\\text { Adminstrative service } & \% \text { of time devoted to branch } & \$ 700,000 \\\text { Development service } & \text { Computer time } & \$ 140,000\end{array}$$ Estimated branch data for next year is as follows:
$$\begin{array} { l c r } & \text { Time to branch } & \text { Computer time } \\\text { Nashville } & 60 \% & 150,000 \text { minutes } \\\text { Atlanta } & 30 \% & 200,000 \text { minutes } \\\text { Louisville } & 10 \% & 50,000 \text { minutes } \\\text { Total } & 100 \% & 400,000 \text { minutes }\end{array}$$
- How much of the headquarters cost allocation should Atlanta expect to receive next year?

• A) $280,000
• B) $560,000
• C) $409,500
• D) $472,500
• E) $504,000

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Definitions:

Taft-Harley Act

Also known as the Labor Management Relations Act of 1947, this law restricted the power and activities of labor unions in the United States.

Decolonization

The process by which African and Asian colonies of European empires became independent in the years following World War II.

Operation Dixie

A post-World War II campaign initiated by the Congress of Industrial Organizations (CIO) aimed at unionizing textile workers and other laborers in the southern United States.

Fair Deal

A set of social and economic reforms proposed by President Harry S. Truman to continue the legacy of the New Deal.