How Much Overhead Cost Will Be Assigned to Each Product

question 177

Multiple Choice

How much overhead cost will be assigned to each product line using activity-based costing (ABC) ?

• A)Dog food: $462,500; cat food: $462,500.
• B)Dog food: $860,000; cat food: $65,000.
• C)Dog food: $60,000; cat food: $45,000.
• D)Dog food: $800,000; cat food: $20,000.
• E)Dog food: $320; cat food: $320.

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Definitions:

Profit-Sharing Programs

Incentive plans introduced by businesses that provide employees with a share of the company's profits beyond their standard pay.

Skill-Based Pay

A compensation system that bases an employee’s pay on the skills, knowledge, and abilities they demonstrate, rather than their job title or position.

Company Profits

The financial surplus generated from a company's operations after subtracting all expenses from its total revenue.

Job-Related Skills

Specific abilities and knowledge required to perform particular tasks or duties in a job.