The Use of Which of the Following Costing Systems Is

question 63

Multiple Choice

The use of which of the following costing systems is most likely to reduce cost distortion to a minimum?

• A)Plantwide overhead rate
• B)Departmental overhead allocation rates
• C)Traditional costing system
• D)Activity-based costing

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Definitions:

Policy

In insurance law, a contract for insurance coverage. The policy spells out the precise terms and conditions as to what will and will not be covered under the contract.

Potential Loss

The possibility of experiencing a negative outcome, often calculated in terms of financial impact.

Risk

A prediction concerning potential loss based on known and unknown factors.

Hazard

A potential source of harm or adverse health effect on a person or persons.