How Does Direct Cost Tracing Improve Cost Accuracy

question 89

Multiple Choice

How does direct cost tracing improve cost accuracy?

• A)It identifies the cause-and-effect relationship between direct costs and indirect costs.
• B)It identifies the cause-and-effect relationship between activities and non-activities.
• C)It reclassifies costs or costs pools that vary with the quantity of a single activity cost driver as direct.
• D)It makes no assumptions about the cause-and-effect relationship between direct costs and activities.
• E)Because with a greater number of cost pools, it does not have to be concerned with the overhead costs used by different products.

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Definitions:

Absorption

The process by which substances are taken up into or across tissues, such as the absorption of nutrients through the intestinal tract into the bloodstream.

Lipoproteins

Molecules made of fat and protein that transport lipids (fats) in the blood.

Cholesterol

A waxy, fat-like substance found in all cells of the body, necessary for making hormones, vitamin D, and substances that help digest foods.

LDL

Low-Density Lipoprotein, often referred to as "bad" cholesterol, which can lead to plaque buildup in arteries, increasing the risk of heart disease.