A System That Focuses on Activities as the Fundamental Cost

question 210

Multiple Choice

A system that focuses on activities as the fundamental cost object and uses the costs for these activities to compile indirect costs of goods and services is

• A)appraisal costs.
• B)value engineering.
• C)activity-based costing.
• D)prevention costs.

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Definitions:

Significant Influence

The power to participate in the financial and operating policy decisions of the investee, but not control or joint control of those policies.

Depreciation

The systematic allocation of the depreciable amount of an asset over its useful life.

Straight-Line Method

A method of depreciation that allocates an asset's cost evenly throughout its useful life.

Carrying Amount

The value at which an asset or liability is recognized on the balance sheet, calculated as its original cost minus depreciation or amortization.