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:

Environmental Context

The external factors that influence an organization or individual's behavior, including economic, social, political, and ecological conditions.

Complex

Describes something that is composed of many interrelated parts or aspects, leading to difficulty in understanding or analysis due to its intricate nature.

McGrath

Refers to Joseph Edward McGrath, a social psychologist known for his research on small group behavior and methodologies.

Diagnosing Group Deficiencies

The process of identifying shortcomings or areas of improvement within a group, often to enhance functionality, cohesion, and performance.