Use This Information for ABC Corporation to Answer the Questions

question 106

Multiple Choice

Use this information for ABC Corporation to answer the questions that follow.
​
ABC Corporation has three service departments with the following costs and activity base:
​
ABC has three operating divisions, Micro, Macro and Super. Their revenue, cost and activity information is as follows:
​

-What will the income of the Macro Division be after all service department allocations?

• A) $780,000
• B) $375,000
• C) $575,000
• D) $435,000

---

Definitions:

Direct Materials Purchases Variance

The difference between the actual cost of direct materials purchased and the expected cost, based on standards set for quantity and price.

Actual Operations

The real-world activities carried out by a company, as opposed to planned or projected operations.

Materials Quantity Variance

The difference between the actual amount of materials used in production and the standard amount expected to be used, multiplied by the standard cost of the materials.

Standard Costs

Predetermined costs for products or services, used as a benchmark for performance evaluation.