Beta Company Is Preparing Its Annual Profit Plan

question 8

Multiple Choice

Beta Company is preparing its annual profit plan.As part of its analysis of the profitability of its customers,management estimates that the $12,000 for sales support should be assigned to the individual customers from the information given as follows: What is the amount of the sales support costs that should be allocated to Customer B,assuming Beta uses units purchased to compute activity-based costs?

• A)$2,400.
• B)$4,000.
• C)$8,000.
• D)$9,600.

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Definitions:

Compulsory Share Exchange

A corporate action where a company acquires all the shares of another company, usually in exchange for its own shares, mandatorily.

Declines to Declare Dividends

The decision by a company's board of directors not to distribute earnings to shareholders in the form of dividends.

Fundamental Change

A significant alteration in the operations, structure, or financial standing of a company that can affect its stakeholders.

Minority Shareholder

A minority shareholder is someone who owns less than 50% of a company's shares and therefore does not have a controlling interest in the company.