Which of the Following Is Not a Step in Designing

question 23

Multiple Choice

Which of the following is not a step in designing a product costing system?

• A)Determine how to form cost pools.
• B)Identify which cost pools to allocate.
• C)Identify the cost driver to use for allocating each cost pool.
• D)Determine the appropriate denominator volume of each cost driver to calculate allocation rates.
• E)All of the above are steps in designing a product costing system.

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Definitions:

Carrying Value

The book value of assets and liabilities recorded in the financial statements, often differing from the market value.

Net Realizable Value

The estimated selling price in the ordinary course of business minus the costs of completion, disposal, and transportation.

Accounts Receivable

The sum of money a company is entitled to receive from its customers for goods or services already delivered or used but not yet paid for.

Inventory

Inventory is the array of finished goods or goods used in production held by a company during its ordinary course of business.