Betterton Corporation Uses an Activity Based Costing System to Assign

question 8

Multiple Choice

Betterton Corporation uses an activity based costing system to assign overhead costs to products.In the first stage, two overhead costs-equipment depreciation and supervisory expense-are allocated to three activity cost pools-Machining, Order Filling, and Other-based on resource consumption.Data to perform these allocations appear below: In the second stage, Machining costs are assigned to products using machine-hours (MHs) and Order Filling costs are assigned to products using the number of orders.The costs in the Other activity cost pool are not assigned to products.Activity data for the company's two products follow: How much overhead cost is allocated to the Machining activity cost pool under activity-based costing in the first stage of allocation?

• A)$300
• B)$11, 300
• C)$24, 500
• D)$24, 800

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Definitions:

Qualitative Variables

Variables that express categorical data and can be described or classified by qualities rather than numerical measures.

Contingency-table Test

A statistical test used to determine whether there is a significant association between two categorical variables.

Expected Cell Frequency

In the context of a contingency table, it is the number of observations expected in a cell based on the hypothesis being tested.

Chi-square Test of Independence

The Chi-square Test of Independence is a statistical test used to determine if there is a significant relationship between two categorical variables.