The Role of Activity-Based Costing for Both Cellular and Independent

question 93

Multiple Choice

The role of activity-based costing for both cellular and independent process manufacturing is to:

• A)determine the profitability of a department.
• B)compute the unit fixed costs incurred by a firm.
• C)assign overhead shared by processes to individual processes.
• D)separate fixed and variable costs incurred by multiple processes.

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Definitions:

One-Line Method

A consolidation method where an investor reports its share of a subsidiary’s or associate’s single line item, such as net income, in its own financial statements.

Equity Method

An accounting technique used by a company to record its investment in another company when it has significant influence but does not have full control.

Joint Ventures

A business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task or business activity.

Accounting Methods

The specific rules and procedures used by a company to prepare its financial statements, including cost, accrual, and cash basis methods.