Using Activity-Cost Rates Rather Than Department Indirect-Cost Rates to Allocate

question 158

Multiple Choice

Using activity-cost rates rather than department indirect-cost rates to allocate costs results in different product costs when ________.

• A) a single activity accounts for a sizable portion of department costs
• B) there are several homogeneous cost pools
• C) different activities have the same cost-allocation base
• D) different products use different resources in the same proportion

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Definitions:

Techniques For Quality Measurement

Methods used to assess the quality of products, services, or processes, often involving quantitative and qualitative metrics.

Functional Approach

The functional approach is a method of organizational structure where a company is divided into departments or functions, each handling specific tasks or operations like marketing, finance, or manufacturing.

Managerial Functions

The main roles and responsibilities of managers, typically including planning, organizing, leading, and controlling organizational resources to achieve goals.

Henri Fayol

A French engineer and scholar who is famous for developing the general theory of business administration and identifying the five primary functions of management.