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:

Advertising Expense

The cost incurred to promote products, services, or the overall brand, which is often reported on the income statement.

Period Costs

Expenses that are not directly tied to the production of goods or services, such as selling, general, and administrative expenses.

Selling

The process of exchanging a product or service for money; involves promoting and delivering goods to customers.

Administrative

Related to the activities that manage, organize, and run an organization including tasks such as budgeting, staffing, and directing resources.