Which of the Following Is an Advantage of Using Practical

question 66

Multiple Choice

Which of the following is an advantage of using practical capacity to allocate costs?

• A) is that it allows a downward supply spiral to develop
• B) is that it focuses management's attention on managing unused capacity
• C) is that budgets are much easier to develop
• D) is that it results in departments bearing a lower percentage of fixed costs

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Definitions:

Strip Bonds

Bonds that have had their principal and coupon payments separated, or "stripped", creating two distinct types of securities: zero-coupon bonds and interest payment coupons.

Compounded Monthly

Refers to the process of adding interest to the principal balance of a loan or investment on a monthly basis, allowing the interest to then earn interest in the subsequent months.

Quadruple

To multiply or increase fourfold; also refers to a quantity that is four times as large as another.

Effective Annual Rate

The interest rate that is adjusted for compounding over a yearly period.