The Activity-Based Resource Usage Model Allows Managers to Better Calculate

question 79

Multiple Choice

The activity-based resource usage model allows managers to better calculate the changes in resource supply and demand resulting from decisions such as:

• A)to make or buy production components.
• B)maximization of individual unit performance.
• C)increasing the allocation of costs.
• D)focusing on managing costs rather than activities.

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Definitions:

After-Tax Salvage Value

The net value of a disposed asset after accounting for taxes on its sale.

Tax Rate

The fraction of earnings taxed from a person or a company.

CCA Class

Refers to categories in the Capital Cost Allowance system where assets are grouped according to their nature and function for tax depreciation purposes in Canada.

Annual Depreciation Tax Shield

This represents the tax savings a company achieves due to depreciation expense, calculated as the depreciation times the tax rate.