While Calculating the Costs of Products and Services, a Standard

question 84

Multiple Choice

While calculating the costs of products and services, a standard costing system ________.

• A) allocates overhead costs on the basis of the actual overhead-cost rates
• B) uses standard costs to determine the cost of products
• C) does not keep track of overhead cost
• D) traces direct costs to output by multiplying the standard prices or rates by the actual quantities

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Definitions:

Portfolio Duration

A measure of the sensitivity of a portfolio's value to changes in interest rates, often used for managing the interest rate risk.

Interest Rates

The expense associated with obtaining a loan, or the incentive for depositing funds, usually shown as a percentage of the original amount.

Zero-Coupon Bond

A bond that does not pay periodic interest payments but is issued at a deep discount from the face value and is redeemed at the face value at maturity.

Duration

A measure of the sensitivity of the price of a financial asset or liability to changes in interest rates, often used with bonds to assess interest rate risk.