A Cost Pool Is

question 115

Multiple Choice

A cost pool is

• A)not necessary in cost-plus contracts.
• B)useful when separating mixed costs into their fixed and variable components.
• C)allocated using a single allocation base.
• D)a method of allocating costs among service departments.

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Definitions:

Investment

The allocation of resources, usually financial, to generate income or profit over time.

Physical Capital

Tangible assets used in the production of goods and services, such as machinery, buildings, and equipment.

Future Goods

Products or services that are not yet manufactured or provided but are planned for future sale.

Inputs

Resources such as labor, materials, and capital that are used in the production process to create goods or services.