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In the Cause-And-Effect Relationship Between Allocation Base and Activity Cost

question 2

Multiple Choice

In the cause-and-effect relationship between allocation base and activity cost in indirect costing systems,the indirect costs of operating modeling machines ________ with molding machine-hours.

Definitions:

Unrealized Gain-Equity

An increase in the value of an investment or asset that has not been sold, as recorded in the equity section of the balance sheet.

Fair Value

The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Equity Security

A financial instrument representing ownership in a company, such as stocks, entitling holders to a share of the company's profits.

Significant Influence

The capacity of an investor to affect the financial or operating policies of an investee without having full control or majority ownership.