Which of the Following Are Reasons for Using Longer Periods

question 198

Multiple Choice

Which of the following are reasons for using longer periods, such as a year, to calculate indirect cost rates?

• A) shorter the period, the greater is the influence of seasonal patterns on the amount of costs
• B) longer the period, the greater is the influence of seasonal patterns on the amount of costs
• C) shorter the period, the smaller is the influence of seasonal patterns on the amount of opportunity costs
• D) longer the period, the smaller is the influence of seasonal patterns on the amount of opportunity costs

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Definitions:

Sales Budget

An estimate of the sales revenue a company aims to achieve in a certain period.

Equipment Acquisitions

Refers to the process of obtaining physical assets for use in production or administrative purposes.

Capital Budget

A financial plan allocating resources for the acquisition or maintenance of long-term assets like property, plants, and equipment.

Variable Operating

Variable Operating Costs are expenses that fluctuate with the level of business activity, including costs like supplies and utilities directly tied to operation levels.