An Activity Cost Driver Is

question 77

Multiple Choice

An activity cost driver is:

• A)a measure of the underlying activity that occurs in each activity cost pool.
• B)a measure of the volume of units produced or customers sold.
• C)a number of activities combined into one cost pool.
• D)the cost assigned to an activity.

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Definitions:

Sales on Account

Transactions where goods are sold and delivered with the understanding that payment will be made at a later date.

Average Collection Period

The average number of days it takes for a business to receive payments from its customers for invoices issued.

Accounts Receivable

Amounts owed to a company by customers for goods or services that have been delivered or sold but not yet paid for.

Sales on Account

Transactions where goods or services are sold with the understanding that payment will be made at a later date.