When Accounting for Long-Term Contracts (Other Than Those for Services),all

question 39

Multiple Choice

When accounting for long-term contracts (other than those for services) ,all of the following accounting methods may be acceptable with the exception of

• A)the allocated completion method of accounting.
• B)the completed contract method.
• C)the percentage of completion method.
• D)the modified percentage of completion method.

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Definitions:

Activity-Based Costing

A costing method that assigns overhead and indirect costs to specific activities, providing a more accurate product cost.

Activity Rates

The costs or rates associated with specific activities used in activity-based costing to allocate expenses to products or services.

Activity Cost Pool

A way to aggregate all indirect costs associated with a particular activity, aiding in more accurate cost allocation.

Direct Labor-Hours

The total hours worked by employees who are directly involved in the manufacturing process or providing service to customers.