Figure 9-2 -Consider Figure 9 -2.Services Can Be Classified by Their Method

question 62

Multiple Choice

Figure 9-2
-Consider Figure 9 -2.Services can be classified by their method of delivery.Box B represents

• A) equipment-based services.
• B) technology-based services.
• C) fee-based services.
• D) people-based services.
• E) nonprofit services.

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Definitions:

Activity-Based Costing

A method of costing that identifies activities in an organization and assigns the cost of each activity to all products and services according to the actual consumption by each.

Fabrication Activity Cost Pool

A grouping of all the costs associated with the fabrication activities in a manufacturing process, used in activity-based costing.

Idle Capacity

Idle capacity refers to the unused portion of the total capacity of a manufacturing unit which could otherwise be used to produce goods and generate revenue.

Activity-Based Costing

A costing method that assigns overhead and indirect costs to specific activities, improving the accuracy of product costing.