Answer the Following Questions Using the Information Below:
Katoomba Company

question 115

Multiple Choice

Answer the following questions using the information below:
Katoomba Company provides the following ABC costing information:
$$\begin{array}{l}\begin{array} { l c l } \text { Activities } & \text { Total Costs } & \text { Activity-cost Drivers } \\\text { Account inquiry hours } & \$ 800000 & 20000 \text { hours } \\\text { Account billing lines } & \$ 560000 & 8000 \text { 000 lines } \\\text { Account verification accounts } & \$ 300000 & 80000 \text { accounts } \\\text { Correspondence letters } & \$ 100000 & 8000 \text { letters } \\\quad \text { Total costs } & \$ 1760000 &\end{array}\\\\\text { The above activities are uæed by Departments } \mathrm { A } \text { and } \mathrm { B } \text { as follows: }\\\\\begin{array} { l l l } & \text { Department A } & \text { Department B } \\\text { Account inquiry hours } & 2000 \text { hours } & 8000 \text { hours } \\\text { Account billing lines } & 400 \text { o00 lines } & 200000 \text { lines } \\\text { Account verification accounts } & 20000 \text { accounts } & 8000 \text { accounts } \\\text { Correspondence letters } & 1000 \text { letters } & 1600 \text { letters }\end{array}\end{array}$$
-How much of the total costs will be assigned to Department B?

• A)$80 000
• B)$158 000
• C)$228 000
• D)$880 000

Distinguish between management accounting and financial accounting.

Comprehend the impact of the changing business environment on management accounting practices.

Acknowledge the importance of budgeting in achieving organizational goals, controlling operations, and providing information for decision-making.

Understand the relationship between management accounting information and organizational strategy.

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Definitions:

Excise Tax

A tax imposed on specific goods and services, such as gasoline, cigarettes, and alcohol.

Upsloping

Describes a line or curve on a graph that moves upward as it progresses from left to right, often used to depict positive relationships between variables.

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of that good that suppliers are willing to offer for sale, holding all else constant.

Highly Inelastic

Describes a situation where demand or supply shows little to no response to changes in price, often due to the lack of close substitutes.