Activity-Based Costing

question 30

Multiple Choice

Activity-based costing

• A) allocates overhead to activity cost pools, and it then assigns the activity cost pools to products and services by means of cost drivers.
• B) accumulates overhead in one cost pool, then assigns the overhead to products and services by means of a cost driver.
• C) assigns activity cost pools to products and services, then allocates overhead back to the activity cost pools.
• D) allocates overhead directly to products and services based on activity levels.

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Definitions:

Gross World Product

The market value of all final goods and services produced in the world during a given period, usually a year.

Net National Product

The total value of goods produced and services provided by a country during a year, minus depreciation. It reflects the total economic output that is not consumed through wear and tear.

National Income

The total value of all income earned within a country, including wages, rents, interest, and profits.

Flow Variable

A measure of something over an interval of time, such as your spending per week.