Which One of the Following Is an Example of Activity-Based

question 61

Multiple Choice

Which one of the following is an example of activity-based costing?

• A)Monitoring the salaries of managers that do untimely quality control checks
• B)Keeping close track of shrinkage associated with thefts off the showroom floor
• C)Insuring that management is closely working with the local union on keeping labour costs in line
• D)Allocating the set up cost associated with getting a machine ready for a production run

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Definitions:

Warrants

Financial instruments that give the holder the right, but not the obligation, to buy shares of a stock at a specified price before the warrant expires.

Convertibles

Securities, such as bonds or preferred shares, that can be converted into a specified number of common shares at the holder's discretion.

Underlying Stock

An underlying stock refers to the equity security upon which derivative securities, such as options and futures, are based.

Ultimate Credit Risk

The risk of loss that occurs when an obligor (such as an issuer of a bond) defaults on its obligations, considering all measures of mitigation.