Dillner Company Uses an Activity-Based Costing System with Three Activity

question 54

Multiple Choice

Dillner Company uses an activity-based costing system with three activity cost pools. The company has provided the following data concerning its costs and its activity based costing system: The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs.
You have been asked to complete the first-stage allocation of costs to the activity cost pools.

-How much cost,in total,should NOT be allocated to orders and products in the second stage of the allocation process if the activity-based costing system is used for internal decision-making?

• A)$104,000
• B)$0
• C)$52,000
• D)$74,000

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Definitions:

Taxes

Compulsory financial charges imposed by a government on individuals and organizations to fund public expenditures.

Disposable Income

Money left after taxes and social security contributions have been subtracted, which can be either spent or saved according to personal preference.

Aggregate Spending

The total spending in an economy, including consumption, investment, government expenditures, and net exports.

Discretionary Fiscal Policy

The deliberate manipulation of government purchases, taxation, and transfer payments to promote macroeconomic goals, such as full employment, price stability, and economic growth