When Selecting a Method of Cost Apportionment an Accountant Should

question 41

Multiple Choice

When selecting a method of cost apportionment an accountant should choose:

• A) the method that best reflects how the asset is used, taking into account its total physical life.
• B) the method that produces the best profit for the firm.
• C) the method stipulated by the taxation department for submitting tax returns.
• D) the method that best reflects the economic use of the asset.

---

Definitions:

Pure Competition

Pure competition is a market structure characterized by a large number of small firms, a homogeneous product, free entry and exit from the market, and perfect information, leading to firms being price takers.

Product Differentiation

The process of distinguishing a product or service from others in the market to make it more attractive to a particular target market segment.

Advertising

The business or task of developing advertising content for commercial offerings.

Pure Competition

A market structure characterized by a large number of small firms, homogenous products, and free entry and exit, leading to minimal profit for the firms.