In an Activity-Cost Pool

question 151

Multiple Choice

In an activity-cost pool

• A)a measure of the activity performed serves as the cost allocation base.
• B)the costs have a cause-and-effect relationship with the cost-allocation base for that activity.
• C)the cost pools are homogeneous over time.
• D)costs in a cost pool can always be traced directly to products.
• E)each pool pertains to a narrow and focused set of costs.

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Definitions:

Fair Value

The capital acquired from the sale of an asset or expended in the transfer of a liability in a smooth transaction among market intermediaries on the measurement date.

Acquisition

The process by which one company takes over the control of or purchases another company.

Appraised Value

An estimate of the fair value of an asset, determined by a professional appraiser based on inspection and analysis of the asset and market conditions.

Consolidated Common Stock

The combined total of common stock held by a parent company and its subsidiaries, presented as a single item in consolidated financial statements.