A Well Designed Activity-Based Costing System Starts with

question 38

Multiple Choice

A well designed activity-based costing system starts with

• A)identifying the activity-cost pools.
• B)computing the activity-based overhead rate.
• C)assigning manufacturing overhead costs for each activity cost pool to products.
• D)analyzing the activities performed to manufacture a product.

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Definitions:

Historical Cost Principle

An accounting principle that states assets should be recorded and reported at their original purchase cost.

Brokerage Fees

Charges levied by brokers for facilitating transactions between buyers and sellers in the financial markets.

Investment

The allocation of resources, typically money, into assets or projects with the expectation of generating income or profit.

Investment Income

Earnings from assets acquired, such as dividends on shares or interest on bonds.