Benton Company Is Preparing Its Annual Profit Plan What Is the Amount of the Purchasing Costs That Should

question 81

Multiple Choice

Benton Company is preparing its annual profit plan.As part of its analysis of the cost of its purchasing activity,management estimates that the $48,000 for purchasing support should be assigned to the individual vendors from the information given as follows:
$$\begin{array} { | l | c | c | } \hline & \text { Vendor A } & \text { Vendor B } \\\hline \text { Units purchased } & 100,000 & 200,000 \\\hline \text { Purchase orders (annual) } & 6 & 24 \\\hline \text { Number of shipments received } & 12 & 52 \\\hline\end{array}$$
What is the amount of the purchasing costs that should be allocated to Vendor B,assuming Benton uses purchases orders to compute activity-based costs?

• A) $9,600
• B) $16,000
• C) $32,000
• D) $38,400

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Definitions:

Linear Forecast

A prediction method that uses historical data to fit a straight line and project future trends in demand, sales, or other financial indicators.

Hierarchy of Effects

A theoretical model designed to explain the process by which individuals move from lack of awareness about a product to actual purchase behavior.

Advocacy Stage

A phase in the consumer decision-making process where individuals or groups promote or support a product, service, or idea.

Loyal Consumers

Customers who repeatedly purchase from a brand or business due to satisfaction, preference, or engagement with the product or service.