Which One of the Following Describes an Activity Base

question 53

Multiple Choice

Which one of the following describes an activity base?

• A)a denominator used by management based on estimated useful lives of the company's plant assets
• B)a measure which is estimated by management based on prior year's operations
• C)a measure that has a correlation with assigning overhead
• D)a guess by management on a fair method of applying overhead

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Definitions:

Value Chain

A model that describes the full range of activities required to create a product or service, from conception through the different phases of production to eventual delivery to the consumer.

Mass Services

Services provided to a large number of customers with standardized processes, often seen in the banking and retail sectors.

High Contact Time

Situations where there is extensive interaction or engagement over a period between two parties, such as in education or customer service.

Process Costing Systems

An accounting system used in manufacturing where costs are assigned to processes or departments and then allocated to products.