Which of the Following Statements Is True

question 17

Multiple Choice

Which of the following statements is true?

• A)Support department cost allocations should be incorporated into a product costing system.
• B)Support department cost allocations should be incorporated into the general accounting system but do not need to be incorporated into a product costing system.
• C)Support department cost allocations can be ignored for more accurate product costing.
• D)Support department cost allocations should be rolled into the general and administrative costs associated with the corporate office expenses.

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Definitions:

Annual Net Cash Inflows

The total cash inflows minus the cash outflows for a business within a one-year period.

Useful Life

The estimated period over which an asset is expected to be usable by a business.

Purchase Machinery

The acquisition of machines or equipment for the production of goods or services.

Discount Rate

This is the discount rate used in the process of discounted cash flow analysis to find out the current value of cash flows expected in the future.