Which of the Following Is a FALSE Statement Regarding Capital

question 19

Multiple Choice

Which of the following is a FALSE statement regarding capital expenditures?

• A)They are a firm's investments in long-lived assets.
• B)They may be tangible assets or intangible assets.
• C)They determine a company's future direction.
• D)They usually involve large amounts of money and the decisions are frequently recoverable.

---

Definitions:

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to products, calculated by dividing estimated overhead costs by an allocation base, such as direct labor hours.

Estimated Annual Overhead Costs

An approximation of the indirect costs that a business expects to incur over a year in its operations.

Expected Annual Operating Activity

The projected level of operations, including production and sales, anticipated for a company over a year.

Common Activity Base

A measure used in activity-based costing for allocating overhead and indirect costs to products or services based on relevant activities.