It Can Be Much More Efficient to Buy Programs That

question 63

True/False

It can be much more efficient to buy programs that have already been created, tested, and proven, and a packaged software system can be bought and installed in a relatively short period of time compared with a custom system.

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Definitions:

Traditional Cost System

A costing method that allocates overhead costs based on a single volume-based cost driver, such as labor hours or machine hours.

Purchase Order

A document issued by a buyer to a seller, indicating types, quantities, and agreed prices for products or services.

Batch-level Activity

Refers to tasks that are performed each time a batch is processed, affecting multiple units of product but not directly correlated to each individual unit.

Departmental Overhead Rates

Specific rates used to allocate overhead costs to products or services based on the expenses incurred by different departments.