The Objectives of a Zero Balance Account System for the Firm

question 136

Multiple Choice

The objectives of a zero balance account system for the firm include

• A)reduce disbursing float.
• B)achieve better control over its cash payments.
• C)increase cash balances in regional rather than national banks.
• D)all of the above are correct.

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Definitions:

Plantwide Predetermined Rate

A single overhead rate calculated using the total estimated overhead costs divided by an estimated allocation base for an entire factory or plant.

Machine-Hours

A measure of the time that a machine is in operation, used in costing and operational analysis.

Departmental Predetermined Rates

Overhead allocation rates set in advance for specific departments to allocate indirect costs more accurately.

Markup

An additional amount included in the cost price of products to account for overheads and gain, thereby establishing the price at which they are sold.