ABC Corporation Has Three Service Departments with the Following Costs

question 120

Multiple Choice

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 are as follows:
What will the income of the Micro Division be after all service department allocations?

• A) $305,000
• B) $650,000
• C) $345,000
• D) $610,000

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Definitions:

Borrowed Money

Funds that are obtained through loans or credits, which must be repaid with interest.

Financing Activities

Transactions and events that affect the long-term liabilities and equity of a company, including issuing debt, issuing equity, and paying dividends.

Cash Flow

The net amount of cash and cash-equivalents being transferred into and out of a business, indicating the organization's liquidity.

Bond Principal

Bond principal, or face value, is the amount that the issuer agrees to pay the bondholder at maturity, excluding any interest payments.