________ Is Considered While Choosing a Cost Allocation Base for Activity

question 26

Multiple Choice

________ is considered while choosing a cost allocation base for activity costs in ABC costing.

• A)The marketing strategy of the products being produced
• B)The product sales price
• C)The availability of reliable data and metrics
• D)The number of employees in direct labor
• E)The number of departments

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Definitions:

Sales Tax

A sales tax is a government-imposed levy on the sale of goods and services, which is usually a percentage of the retail price.

Freight Charges

Costs associated with the transportation of goods from one location to another, typically paid by the shipper or receiver.

Straight-Line Method

A method of calculating depreciation of an asset by evenly spreading its cost over its expected useful life.

Salvage Value

The estimated residual value of an asset after its useful life has ended and it can no longer be used for its originally intended purpose.