During Periods of Economic Expansion, the Spread Between Corporate Bonds

question 3

Multiple Choice

During periods of economic expansion, the spread between corporate bonds and U.S. Treasuries generally:

• A) widens.
• B) narrows.
• C) stays the same.
• D) becomes negative.

---

Definitions:

Activity-Based Costing

A costing methodology that assigns costs to products and services based on the activities required to produce them.

Overhead Costs

Indirect costs of running a business that are not directly attributable to a specific product or service, such as rent, utilities, and administrative expenses.

Cost Drivers

Factors that cause the cost of a product or service to change.

Single Plantwide Overhead Rate

A method in cost accounting where a single rate is used to allocate all of a plant's manufacturing overhead costs to its products.