In Which of the Following Scenarios Does Duration-Based Costing Match

question 120

Multiple Choice

In which of the following scenarios does Duration-Based Costing match Activity-Based Costing?

• A)When there is no correlation between the consumption ratio and total activity time
• B)When the consumption ratio increases with an increase in total activity time
• C)When there is a direct correlation between activity cost and consumption ratio
• D)When the consumption ratio decreases with a decrease in total activity time

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Definitions:

Consignee

The individual or entity designated to receive goods being shipped or transported, who may not be the actual owner of the goods until certain conditions are met.

Consignment

A business arrangement in which goods are left in the possession of another party to sell, but ownership remains with the supplier until the goods are sold.

Inventory Items

Goods and materials that a business holds for the ultimate goal of resale or production in the course of operations.

LIFO Method

An inventory valuation method that assumes the last items placed in inventory are the first ones sold; LIFO stands for Last-In, First-Out.