Which of the Following Is Incorrect Regarding Service Firms

question 1

Multiple Choice

Which of the following is incorrect regarding service firms?

• A)Each client or account is equivalent to a process in a process costing firm.
• B)The accounting system will track the time and resources spent serving a specific client or account.
• C)Managers of service firms need cost information to price their services,to budget and control costs,and to determine the profitability of different types of clients.
• D)The primary driver used to assign costs is billable hours.

---

Definitions:

Marginal Utility Function

A mathematical representation that describes how the utility or satisfaction derived from consuming an additional unit of a good changes as more of the good is consumed.

Utility Function

A utility function is a mathematical representation of a consumer's preference ranking for different bundles of goods, showing the level of satisfaction for each.

Wealth

A substantial amount of monetary assets or physical valuables that are capable of being changed into a format usable for trading purposes.

Utility Function

A mathematical representation of how a consumer ranks different bundles of goods according to their level of satisfaction or utility.