What Is a Duration Driver

question 13

Multiple Choice

What is a duration driver?

• A) A simple count of the number of times an activity occurs.
• B) An activity measure that is used for the life of the company.
• C) A measure of the amount of time required to perform an activity.
• D) An activity measure that is used for the life of an activity-based costing system.

---

Definitions:

Perpetual inventory system

A method of accounting for inventory that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.

LIFO cost method

An inventory costing method that assumes the last items purchased or produced are the first ones sold, impacting the cost of goods sold and inventory valuation.

Gross profit

The difference between revenue and the cost of goods sold before accounting for certain other costs like operating expenses.

Perpetual inventory system

Inventory accounting where transactions are recorded in real-time, updating the inventory account continuously.