Aqua Company Produces Two Products-Alpha and Beta

question 14

Multiple Choice

Aqua Company produces two products-Alpha and Beta. Alpha has a high market share and is produced in bulk. Production of Beta is based on customer orders and is custom designed. Also, 55% of Beta's cost is shared between design and setup costs, while Alpha's major portions of costs are direct costs. Alpha is using a single cost pool to allocate indirect costs. Which of the following statements is true of Aqua?

• A) Aqua will overcost Beta's direct costs as it is using a single cost pool to allocate indirect costs.
• B) Aqua will undercost Alpha's indirect costs because alpha has high direct costs.
• C) Aqua will overcost Alpha's indirect costs as it is using a single cost pool to allocate indirect costs.
• D) Aqua will overcost Beta's indirect costs because beta has high indirect costs.

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Definitions:

Pleasure-Seeking Energies

Pleasure-Seeking Energies involve the basic drives and instincts that compel individuals to seek out experiences or objects that provide gratification and enjoyment.

Conflict

A situation or process in which individuals, groups, or interests are in opposition, leading to disputes or confrontations.

Gender Identity

An individual's personal sense of their own gender, which may or may not correspond with their sex assigned at birth.

Male

A sex that typically produces small, mobile gametes, such as sperm, characteristic of males in species that have sexual reproduction.