Thoen Nuptial Bakery Makes Very Elaborate Wedding Cakes to Order

question 126

Multiple Choice

Thoen Nuptial Bakery makes very elaborate wedding cakes to order.The company has an activity-based costing system with three activity cost pools.The activity rate for the Size-Related activity cost pool is $0.96 per guest.(The greater the number of guests, the larger the cake. ) The activity rate for the Complexity-Related cost pool is $54.24 per tier.(Cakes with more tiers are more complex. ) Finally, the activity rate for the Order-Related activity cost pool is $56.44 per order.(Each wedding involves one order for a cake. ) The activity rates include the costs of raw ingredients such as flour, sugar, eggs, and shortening.The activity rates do not include the costs of purchased decorations such as miniature statues and wedding bells, which are accounted for separately. Data concerning two recent orders appear below: Assuming that all of the costs listed above are avoidable costs in the event that an order is turned down, what amount would the company have to charge for the Nie wedding cake to just break even?

• A)$56.44
• B)$306.98
• C)$23.50
• D)$371.45

---

Definitions:

Personality Traits

Enduring characteristics and behaviors that define an individual's patterns of thought, feelings, and actions.

Factor-analytic Research

A statistical method used to describe variability among observed, correlated variables in terms of a potentially lower number of unobserved variables called factors.

Apprehension

The feeling of fear or anxiety about something that may happen.

Factor Analysis

A statistical approach for discovering the root variables, or factors, that are responsible for the observed correlation patterns among a set of variables.