Accounts Can Be Retained in the Face of Extreme Contingencies

question 17

Multiple Choice

Accounts can be retained in the face of extreme contingencies if:

• A) Every possible event is anticipated
• B) The contract gives guidelines for joint action and adjustment
• C) Obligations are only imposed upon one party
• D) If the contract is a non-verbal one
• E) It makes specific investments in people

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Definitions:

Allocation Base

A factor used to distribute costs among different departments, products, or activities in a systematic and rational manner.

Budgeted Plantwide Overhead

An estimate of the total overhead costs to be allocated across the whole plant or company, used for budgeting and costing purposes.

First Stage Cost Objects

In activity-based costing, initial categories where costs are collected before being assigned to final cost objects based on their use of activities.