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:

Optimal Combination

The best mix of different factors or elements (such as resources or inputs) to achieve a desired outcome or objective.

Inputs

The resources used in the production process, including labor, raw materials, and capital.

Least Costly

Refers to the option that requires the smallest amount of expense or effort to achieve a given outcome.

Perfectly Competitive

A market structure characterized by a large number of small firms, a homogeneous product, and free entry and exit, leading to efficient outcomes.