Accounting Makes All the Following Contributions to the Capital Budgeting

question 82

Multiple Choice

Accounting makes all the following contributions to the capital budgeting process except:

• A) The theoretical development of appropriate decision models.
• B) Linkage of capital investment projects to the organization's Balanced Scorecard (BSC).
• C) Conducting post-audits of capital investment decisions.
• D) Generation of relevant (i.e., cash flow) data for investment-analysis purposes.
• E) Performing sensitivity or "what-if" analysis of proposed capital investments.

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Definitions:

Activity-Based Costing

A method of costing that apportions indirect expenses and overhead to specific operations, enhancing the accuracy of product cost calculations.

Direct Labor-Hours

The total hours of work directly contributed by laborers to produce goods or services.

Manufacturing Overhead

The indirect costs involved in making a product, excluding direct materials and direct labor expenses.

Predetermined Overhead Rate

A rate used to apply manufacturing overhead to products or job orders, computed in advance for each period.