(Consider This) Which of the Following Statements Is True About

question 47

Multiple Choice

(Consider This) Which of the following statements is true about U.S.firms?

• A)Over half are bankrupt within the first two years after starting up.
• B)Over half are bankrupt within the first five years after starting up.
• C)Nearly 65 percent last 10 years or more.
• D)The life expectancy of a U.S.firm is approximately 22 years.

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Definitions:

Cost Object

Anything for which cost data are desired. Examples of cost objects are products, customers, geographic regions, and parts of the organization such as departments or divisions.

Indirect Cost

Costs that are not directly traceable to a specific product, project, or activity, such as utilities, rent, and administrative expenses.

Direct Cost

A cost that can be easily and conveniently traced to a specified cost object.

Prime Cost

Direct materials cost plus direct labor cost.