In a Preference Decision, Which of the Following Criteria Might

question 101

Multiple Choice

In a preference decision, which of the following criteria might be used to rank-order the projects?

• A)Rate of return
• B)Return on investment
• C)Expected opportunities in a new market niche
• D)All of these answer choices are correct.

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Definitions:

Variable Overhead Rate

The rate at which variable overhead costs are allocated to each unit of production, based on a certain activity level.

Direct Labor-Hours

Comprehensive work time recorded by employees who are directly engaged in producing goods.

Denominator Level

The level of activity chosen to allocate fixed costs in absorption costing, often representing capacity or expected production volume.

Variable Overhead Rate

the rate at which variable overhead costs are applied to units of production, often used in calculating the total cost of producing a product.