Higbie Corporation Uses an Activity-Based Costing System with Three Activity

question 123

Multiple Choice

Higbie Corporation uses an activity-based costing system with three activity cost pools.The company has provided the following data concerning its costs: The distribution of resource consumption across the three activity cost pools is given below: How much cost,in total,would be allocated in the first-stage allocation to the Fabricating activity cost pool?

• A)$76,000
• B)$204,000
• C)$152,000
• D)$266,000

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Definitions:

Economies Of Scope

cost advantages that enterprises obtain due to the efficient allocation and utilization of resources across multiple products or services.

Diseconomies Of Scope

A situation in which a company experiences increased costs as a result of increasing the variety of goods or services it produces.

Economies Of Scope

Cost advantages that enterprises obtain due to the efficient production of a wider variety of goods or services together rather than separately.

Long-Run Marginal Cost

The cost of producing one more unit of a product when all production factors are variable.