Which of the Following Is True of Refinement of a Costing

question 134

Multiple Choice

Which of the following is true of refinement of a costing system?

• A) While refining a costing system, companies should identify as many indirect costs as is economically feasible.
• B) A homogeneous cost pool will use multiple cost drivers to allocate costs.
• C) It reduces the use of broad averages for assigning the cost of resources to cost objects.
• D) It is likely to yield the most decision-making benefits when direct costs are a high percentage of total costs.

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Definitions:

Demand Schedule

A table that shows the quantity of a good that consumers are willing to buy at different prices.

Parallel

Lines or paths that remain the same distance apart at every point, never meeting or intersecting.

Elasticity Coefficient

A numerical value that measures the responsiveness of the quantity demanded or supplied of a product to a change in one of its determinants, such as price or income.

Percentage Change

A mathematical calculation that indicates the degree of change over time, expressed as a percentage, often used to measure growth or decline in economic indicators.