Capizzi Corporation Has an Activity-Based Costing System with Three Activity

question 34

Multiple Choice

Capizzi Corporation has an activity-based costing system with three activity cost pools-Machining, Order Filling, and Other. In the first stage allocations, costs in the two overhead accounts, equipment depreciation and supervisory expense, are allocated to three activity cost pools based on resource consumption. Data used in the first stage allocations follow: 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:
-What is the overhead cost assigned to Product V2 under activity-based costing?

• A)$28,980
• B)$5,600
• C)$34,580
• D)$40,000

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Definitions:

Central Tendency Bias

The tendency to rate all objects or individuals as average on a scale, avoiding extreme assessments.

Rater Bias

The tendency of assessors, such as managers or supervisors, to make inaccurate appraisals of others due to personal bias or preconceptions.

Performance Appraisal System

A formal process by which an employee's job performance is assessed, typically involving evaluation against predefined objectives and providing feedback for development.

Reliable

The quality of being consistently good in performance, accuracy, or dependability.