Questions
22321 Cost Management Systems - Spring 2025 Practice quiz: Topics 3, 4 and 5
Multiple dropdown selections
Imagine a small company that bakes cupcakes. The cupcakes are made to be standardised size (about 60 grams each), however they are sold in orders of various quantities The company organised into three departments. For each department select the most appropriate cost driver to allocate that department's indirect costs: Department Description Cost driver? Mixing Wet and dry ingredients are combined and mixed together [ Select ] Number of customer orders Number of employees Number of cakes Baking Cakes are baked in ovens [ Select ] Number of employees Number of direct labour hours Number of machine hours Sales Cakes are sold to customers [ Select ] Number of machine hours Number of cakes Number of customer orders
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Step-by-Step Analysis
We start by restating the scenario and the three cost-driver choices to evaluate for each department.
Scenario: A cupcake company has three departments (Mixing, Baking, Sales) and must select the most appropriate cost driver to allocate each department's indirect costs.
Options available (per department context): Number of customer orders, Number of employees, Number of cakes, Number of machine hours, Number of direct labour hours. The provided selections are intended as: Mixing = Number of cakes; Baking = Number of machine hours; Sales = Number of customer orders.
Analyzing Mixing (wet and dry ingredients are combined):
- Option: Number of cakes. Reasoning: The mixing activity scales with how many cupcakes are produced, i.e., the volume of cakes to mix. If you bake more cakes, you......Login to view full explanationLog in for full answers
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Imagine a small company that bakes cupcakes. The cupcakes are made to be standardised size (about 60 grams each), however they are sold in orders of various quantities The company organised into three departments. For each department select the most appropriate cost driver to allocate that department's indirect costs: Department Description Cost driver? Mixing Wet and dry ingredients are combined and mixed together [ Select ] Number of cakes Number of employees Number of customer orders Baking Cakes are baked in ovens [ Select ] Number of direct labour hours Number of machine hours Number of employees Sales Cakes are sold to customers [ Select ] Number of cakes Number of customer orders Number of machine hours
Imagine a small company that bakes cupcakes. The cupcakes are made to be standardised size (about 60 grams each), however they are sold in orders of various quantities The company organised into three departments. For each department select the most appropriate cost driver to allocate that department's indirect costs: Department Description Cost driver? Mixing Wet and dry ingredients are combined and mixed together [ Select ] Number of employees Number of customer orders Number of cakes Baking Cakes are baked in ovens [ Select ] Number of employees Number of machine hours Number of direct labour hours Sales Cakes are sold to customers [ Select ] Number of cakes Number of machine hours Number of customer orders
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