Gollum, Inc. has decided to use separate manufacturing overhead rates for each of its production departments in order to allocate its manufacturing overhead.Gollum is using:

A. departmental overhead rates

B. activity-based costing

C. cost distortion

D. a plantwide overhead rate

Question 2

Cheez-E Grill is considering opening a food truck to operate in addition to its existing restaurant. Information about the proposal appears below: Initial Investment $80,000 Project term 10 years Projected annual cash flow $14,000 The company uses a 14% discount rate to evaluate its projects. What is the net present value of the food truck proposal? Present Value of a Dollar periods 10% 12% 14% 10 .386 .322 .27 Present Value of an Annuity periods 10% 12% 14% 10 6.145 5.65 5.216 0 -$42,200 0 $42,200 0 $6,976 0 $16,200