If Activity-Based Costing Is Used, Modifications Made by Engineering to the Product

question 171

Multiple Choice

If activity-based costing is used, modifications made by engineering to the product design of several products would be classified as a

• A)product-level activity.
• B)batch-level activity.
• C)unit-level activity.
• D)facility-level activity.

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Definitions:

Stockholders' Equity

Represents the ownership interest of shareholders in the corporation, calculated as total assets minus total liabilities.

Noncumulative Preferred Stock

A type of preferred stock where dividend payments are not required to be paid in periods when they are not declared.

Dividends Received

The payments a shareholder receives from a company out of its profits or reserves as a return on the shareholder's investment.

Par Value

The face value of a bond or stock as stated by the issuing company, not necessarily its market value.