The Method That Uses Cost as an Overriding Basis for Sample

question 61

Multiple Choice

The method that uses cost as an overriding basis for sample size is called:

• A)The budget override approach.
• B)The sample cost approach.
• C)The"all you can afford"approach.
• D)The minimum cost expenditure approach.

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Definitions:

Internal Rate Of Return Method

A method of calculating the profitability of potential investments where the net present value of all cash flows equals zero.

Capital Budgeting

Capital Budgeting is the process by which organizations evaluate potential major projects or investments to determine their value and allocation of capital.

Allocated Fixed Costs

Fixed costs that are distributed among different departments or products based on prescribed criteria.

Direct Fixed Costs

Costs that relate specifically to a responsibility center and are incurred for the sole benefit of the center.