ABC Corporation Has Three Service Departments with the Following Costs

question 5

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:
How much service department cost will be allocated to the Micro Division?

• A) $200,000
• B) $145,000
• C) $60,000
• D) $345,000

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Definitions:

Dominant Strategy

A strategy in game theory that is best for a player, regardless of the strategies chosen by other players.

Equilibrium Outcome

The point at which market supply and demand balance each other, and, as a result, prices become stable.

Mixed Strategies Equilibrium

is a concept in game theory where each player in a game chooses a combination of actions and their associated probabilities to maximize their utility under uncertainty.

Equilibria

The state of balance in a market or other system where supply and demand are matched, and there is no tendency to change.