Technician a Says Engine Blocks Are Made from Cast Iron

question 4

Multiple Choice

Technician A says engine blocks are made from cast iron. Technician B says engine blocks are made from aluminum. Who is correct?

• A) A only
• B) B only
• C) both A and B
• D) neither A nor B

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Definitions:

Overhead Cost

All ongoing business expenses not directly attributed to creating a product or service, including rent, utilities, and salaries of non-production employees.

Activity Cost Pools

Collections of all the costs associated with a particular business activity, facilitating more precise allocation of overheads.

Overhead Cost

Indirect expenses related to the production of goods or services, such as rent, utilities, and salaries of management, that cannot be directly tied to a specific product.

Activity Cost Pools

Groupings of individual costs, driven by the same cost drivers, used in activity-based costing to allocate costs more precisely to products or services.