1. When considering implementing activity-based costing, management should consider all advantages and disadvantages. Which of the following would be considered a disadvantage?

1. Better pricing decisions.

2. Employee pushback

3. More precise profit planning

4. Sound make-or-buy decisions

QUESTION 4

1. Fashion Express, Inc. is a clothing retail vendor that specializes in modern women's clothing. They incurred costs of $146,000 last year to facilitate their staff performing customer service and sales activities. These resources create a capacity of 210,000 minutes for Fashion Express within their customer service and sales activity per year. On average, servicing all customers requires the following transactions throughout the year: processing sales orders, 105,000 minutes; restocking merchandise, 44,500 minutes; cash register, 50,450 minutes; and issuing returns, 10,050 minutes. Using Time-Driven Activity-Based Costing (TDABC), how much cost will be allocated to the cash register transactions? (If required, round calculations to two decimal places.)

1. $31,350.00

2. $35,315.00

3. $72,565.07

4. $73,500.00