After All Activity Costs Are Accumulated in an Activity Cost

question 33

Multiple Choice

After all activity costs are accumulated in an activity cost pool account,overhead rates are computed and costs are allocated to cost objects based on:

• A)Direct factors.
• B)Indirect factors.
• C)Cost drivers.
• D)Joint cost principles.
• E)Opportunity cost principles.

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Definitions:

Quantity Effect

The impact on total revenue when the quantity sold changes while the price remains the same.

Marginal Cost

The increased expenditure resulting from making an additional unit of a product or service.

Oligopoly

A market structure characterized by a small number of firms that have significant market power, leading to limited competition.

Price Fixing

An illegal practice where businesses collude to set prices at a certain level, rather than allowing market forces to determine them.