The Major Reason for Using Practical Capacity as the Denominator

question 79

Multiple Choice

The major reason for using practical capacity as the denominator for activity driver calculations is to:

• A)avoid distortions induced by the assignment of unused capacity costs to the products produced or customer served.
• B)simplify the calculations of the activity cost drivers.
• C)reduce the cost of unused capacity.
• D)place less emphasis on the cost of unused capacity.

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Definitions:

Idiosyncratic

Pertaining to peculiar or individual characteristics or behaviors that distinguish someone or something from others.

Individualistic Understanding

A way of interpreting information or phenomena based on personal perspectives and independent thought.

Evaluate Treatments

The process of systematically assessing the effectiveness and outcomes of medical, psychological, or educational interventions.

Experimental Studies

Research methods that involve the manipulation of variables to establish cause and effect relationships.