Which of the Following Organizations Is Likely to Use the Multiple-Factor

question 134

Multiple Choice

Which of the following organizations is likely to use the multiple-factor index method to estimate the market potential?

• A) a firm that manufactures auto parts
• B) a firm that provides facility management services to large offices
• C) a company that provides Web site development services for small businesses
• D) a company that manufactures diagnostic machines for hospitals
• E) a firm that manufactures fashionable clothes for teenagers

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Definitions:

Process Costing System

A costing method used for homogeneous products, allocating costs based on the process or department through which they pass.

Factory Labor Costs

The total expense incurred by a company for the labor used in the production of goods, including wages, benefits, and taxes.

Factory Labor Expense

Costs associated with the wages and benefits of factory workers directly involved in producing goods.

Process Costing System

A costing method used in industries where production is continuous, assigning costs to units of product based on the process they go through.