The Process of First Allocating Costs to Intermediate Cost Pools

question 79

Multiple Choice

The process of first allocating costs to intermediate cost pools and then to the individual cost objects using different allocation bases is a(n) :

• A) continuous flow process.
• B) cost management system.
• C) two-stage allocation system.
• D) operations cost.

---

Definitions:

Tax Rate

The extent to which the government extracts a percentage of income as taxes from businesses or people.

Market Value

The current exchange rate for acquiring or disposing of a service or asset.

Bond Issue

A financial instrument issued by a corporation or government as a way of borrowing money, where the issuer promises to pay back the face value on a specific date, along with periodic interest payments.

Weighted Average Cost of Capital (WACC)

A calculation of a firm's cost of capital, weighted by the proportion of each component of capital, including debt and equity.