Cost Allocation Bases in Activity-Based Costing Should Be

question 134

Multiple Choice

Cost allocation bases in activity-based costing should be

• A)cost drivers.
• B)value-added activities.
• C)activity centers.
• D)processes.

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Definitions:

Purely Competitive

A market scenario where the selling price of products is determined by the overall supply and demand, with numerous sellers and homogeneous products.

Elastic

Describes a condition in economics where the demand or supply for a product is sensitive to changes in price, leading to significant changes in quantity demanded or supplied.

Herfindahl Index

A measure of market concentration, determining the competitiveness of an industry based on the sum of the squares of the market shares of all firms within it.

Product Differentiation

The strategy of distinguishing a product or service from others in the market to make it more attractive to a particular target market.