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

question 123

Multiple Choice

Ginger Corporation 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: How much cost, in total, would be allocated in the first-stage allocation to the Setting Up activity cost pool?

• A)$528,000
• B)$454,000
• C)$418,000
• D)$396,000

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Definitions:

Interest-Bearing Note

A debt instrument that pays interest to the holder at a fixed or variable rate over a specified period.

Interest Expense

The cost incurred by an entity for borrowed funds, considered a non-operating expense on the income statement.

Notes Payable

A formal written agreement in which one party agrees to pay another a specific sum of money, either on demand or at a determined future date.

Interest-Bearing Note

A debt instrument that pays interest to the holder until its maturity date.