How Does Activity-Based Costing View Overhead Costs

question 51

Multiple Choice

How does activity-based costing view overhead costs?

• A)as the responsibility of each department.
• B)as unimportant in the development of full costs.
• C)as rendering service to cost units.
• D)as caused by activities which 'drive' the costs.

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Definitions:

After-Tax Discount Rate

The rate used to discount future cash flows to their present value, taking into account the effects of taxes.

Straight-Line Depreciation

A method of calculating depreciation of an asset by evenly spreading its cost over the expected useful life.

After-Tax Discount Rate

The rate used to discount future cash flows to their present value after accounting for the effects of taxes, reflecting the net cost of capital to the company.

Income Tax Rate

The percentage at which an individual or corporation is taxed on their income, which can vary by income level and jurisdiction.