Transactions Costs Are

question 61

Multiple Choice

Transactions costs are

• A)zero in financial markets.
• B)zero in financial intermediaries.
• C)the costs of buying and selling financial claims.
• D)equal to the taxes imposed on financial transactions.

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Definitions:

Plantwide Overhead Rate

A single overhead absorption rate used throughout an entire plant or company to allocate indirect costs to products.

Overhead Rate Methods

Different methodologies used to allocate overhead costs to products or services based on criteria such as direct labor hours, machine hours, or direct material costs.

Departmental Overhead Rate

This rate is used to allocate indirect costs to specific departments, based on a relevant metric like labor hours or machine hours.

Activity-Based Costing

A pricing strategy that tracks the various tasks performed within a company, allocating the associated costs to different products and services in proportion to their direct usage.