Which of the Following Would Not Be a GAAP or Managerial

question 80

Multiple Choice

Which of the following would not be a GAAP or managerial accounting reason for allocating joint costs?

• A) to calculate cost of goods sold
• B) to analyze the profitability of various products
• C) for reimbursement of costs under a federal contract
• D) to evaluate the performance of division managers

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Definitions:

Opportunity Cost

The cost of foregoing the next best alternative when making a decision, representing the benefits one misses out on when choosing one option over another.

Constant Rate

A fixed value of change in a quantity with respect to another quantity, often used in mathematics and economics to describe steady growth or decline.

Opportunity Cost

Missing potential benefits that could have been gained from unchosen options when deciding on one.

Production Possibilities

A graphical representation that shows the maximum combination of goods or services that can be produced with a fixed amount of resources.