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:

Inelastic Demand

A demand relationship in which a given percentage change in price results in a smaller percentage change in quantity sold.

Various Brands

A diversity of products or services offered under different trademarks by companies to cater to varying customer preferences.

Elastic Demand Curve

The elastic demand curve represents a situation where the quantity demanded for a good or service varies significantly as its price changes.

Fresh Fruit

Pertains to fruits that are in their natural state, not processed or preserved, and are consumed for their nutritional value and taste.