In Firms Using Activity-Based Costing (ABC), Budgeted Total Factory Overhead

question 64

Multiple Choice

In firms using activity-based costing (ABC) , budgeted total factory overhead varies with changes in:

• A) A single cost driver for applying overhead.
• B) Several cost drivers.
• C) The selected denominator activity level.
• D) The quantity of input resources used in operations of the period.
• E) Only batch-level cost drivers.

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Definitions:

Checks

Written, dated, and signed instruments that direct a bank to pay a specific sum of money to the bearer or to the order of a person.

Promissory Notes

A written agreement to pay a specified amount of money, either on demand or at a defined future date.

Banker's Acceptance

A short-term debt instrument issued by a company that is guaranteed by a commercial bank, used in international trade.

International

Relating to, involving, or encompassing several countries or spanning across national boundaries.