Consider the Budget Information for Bert and Ernie Design Firm

question 23

Multiple Choice

Consider the budget information for Bert and Ernie Design firm: Bert and Ernie decide there are two cost pools,design support,which is assigned to jobs based on the number of rooms redone,and facilities costs,which is assigned to jobs based on the number of professional labor hours.The design support cost pool includes design equipment depreciation and samples and books.The lease expense and utilities are considered facilities costs. What is the budgeted rate per cost driver for facilities costs?

• A)$17.50
• B)$1.05
• C)$.70
• D)$37.50

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Definitions:

Differential Cost

The variation in overall expenses incurred from choosing one option instead of another.

Machine

An apparatus used for a specific purpose in industrial settings, commonly for manufacturing, processing, or shaping materials.

Helpline Costs

Expenses incurred in operating a support service that provides assistance to users, typically over the phone or online.

Volume

In finance, it refers to the total number of shares or contracts traded for a specific security or market during a given period.