In a Costing System

question 99

Multiple Choice

In a costing system

• A)cost tracing allocates indirect costs.
• B)cost allocation assigns direct costs.
• C)there may never be more than one indirect cost pool.
• D)a cost object should be a product and not a department or a geographic territory.
• E)a cost allocation base can be either financial or nonfinancial.

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Definitions:

Compensating Differential

The compensating differential is the difference in wages that arises to offset the non-monetary characteristics of different jobs, such as riskiness or unpleasantness.

Wage Disparity

The difference in wages earned by different groups of workers, often due to factors like gender, education, or ethnicity.

Equilibrium Wage

The wage rate at which the quantity of labor supplied equals the quantity of labor demanded in the market.

Efficiency Wage

A higher wage paid by employers to increase productivity by attracting better applicants, reducing turnover, and motivating employees.