Which of the Following Is TRUE Concerning Selecting a Cost-Allocation

question 154

Multiple Choice

Which of the following is TRUE concerning selecting a cost-allocation base in an ABC system?

• A)Cost-allocation bases are not relevant in defining the number of activity pools.
• B)All costs can be directly identified with a specific activity.
• C)The allocation base chosen may be constrained by the availability of reliable data.
• D)Costs may need to be allocated to services first, before the costs of services can be allocated to activities.
• E)Output unit-level costs cannot be related to a cost-allocation base.

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Definitions:

Takeover Bids

Takeover bids are proposals or offers made by a company or individual to purchase a significant portion, or all, of another company's shares to gain control of it.

Voting Shares

Shares of a company that grant the shareholder the right to vote on company matters, typically at shareholders' meetings.

Reporting Issuer

A company or entity that is obligated to submit regular financial and operational reports to a regulatory agency.

Distribution of Securities

The process of making securities available to investors, typically through sale, in accordance with regulatory requirements.