Rachael Runs a Cleaning Service That Relies on a High

question 26

Multiple Choice

Rachael runs a cleaning service that relies on a high level of automation,and is less labour intensive than most other cleaning businesses.Which of the four drivers below would you consider best for allocating her overhead costs?

• A) Machine hours
• B) Direct labour hours
• C) Direct labour cost
• D) Floor space

---

Definitions:

Perfection

A legal process that gives a secured creditor priority over claims from other creditors regarding a debtor's asset.

Collateral

Assets pledged by a borrower to secure a loan or other credit, which can be seized by the lender if the borrower defaults.

Secured Party

An individual or entity holding an interest in a secured transaction as security for performance obligation, typically involving collateral.

Attachment

A legal process by which a court of law, at the request of a creditor, designates specific property owned by the debtor to be transferred to the creditor, or sold for the benefit of the creditor.