Unlike a Product, Services Offered by a University Cannot Be

question 21

Multiple Choice

Unlike a product, services offered by a university cannot be seen, smelled, heard, or touched prior to purchase. This implies that services are:

• A) intangible.
• B) perishable.
• C) inseparable.
• D) variable.
• E) heterogeneous.

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Definitions:

ABC System

The Activity-Based Costing system that assigns manufacturing overhead costs to products in a more logical manner by taking into account the specific activities that incur costs.

Activity Cost Pools

Groups of related costs that are associated with particular activities, used in activity-based costing.

Direct Labor Costs

These are wages and benefits paid to employees who are directly involved in the production of goods.

Activity Cost Pools

Groupings of individual costs associated with particular activities, used in activity-based costing to allocate costs more precisely.