A Company Incurred $120,000 of Common Fixed Costs and $180,000

question 21

Multiple Choice

A company incurred $120,000 of common fixed costs and $180,000 of common variable costs. These costs are to be allocated to Departments XX and YY. Data on capacity provided and capacity used are as follows: Assume that common fixed costs are to be allocated to Departments XX and YY on the basis of capacity provided and that common variable costs are to be allocated to Departments XX and YY on the basis of capacity used. The fixed and variable costs allocated to Department XX are

• A) $75,000 $112,500
• B) $75,000 $90,000
• C) $60,000 $112,500
• D) $60,000 $90,000

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Definitions:

Random Assignment

A method used in experiments to evenly distribute participants across various groups, ensuring that each has an equal chance of being assigned to any group.

Selection Bias

The assignment of participants to experimental or control groups in such a way that systematic differences among the groups are present at the beginning of the experiment.

Placebo Effect

A phenomenon where a person experiences a perceived improvement in condition due to their expectations, rather than the effect of an active intervention.

Placebo Effect

A psychological phenomenon where patients experience perceived or actual improvements in their condition due to their belief in the efficacy of a treatment that is inert or not specifically effective for the condition being treated.