The Activity Rates in Activity-Based Costing Are Computed by Dividing

question 131

True/False

The activity rates in activity-based costing are computed by dividing the direct labor-hours for an activity cost pool by the measure of activity for the activity cost pool.

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Definitions:

Perpetuity

A financial instrument that provides a stream of infinite cash flows or payments that continue indefinitely.

Annual Percentage Rate (APR)

The interest rate charged per period multiplied by the number of periods per year.

Annuity Due

An annuity for which the cash flows occur at the beginning of the period.