Ssume That a Pet Food Manufacturer Is Considering Adding Two

question 94

Multiple Choice

ssume that a pet food manufacturer is considering adding two types of pet food to their existing product line. Research had determined that there is good demand for dog food in forty pound bags and cat food in one-half pound cans.
The company identified the following partial list of activities, costs, and activity drivers expected for the next year.

-Refer to the data above. How much overhead cost will be assigned to each product line using activity-based costing (ABC) ?

• A) Dog Food: $462,500; Cat Food: $462,500.
• B) Dog Food: $860,000; Cat Food: $65,000.
• C) Dog Food: $60,000; Cat Food: $45,000.
• D) Dog Food: $800,000; Cat Food: $20,000.
• E) Dog Food: $320; Cat Food: $320.

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Definitions:

Budget Line

A graphical representation of all possible combinations of two goods that can be purchased with a given budget at set prices.

Fixed Money Income

An income level that remains constant and does not adjust for inflation or economic conditions.

Budget Line

A graphical representation showing all possible combinations of two goods that can be purchased with a given budget at set prices.

Indifference Curve

A graph representing different bundles of goods among which a consumer is indifferent, showing preferences for various combinations of two products.