Identifying Activities Performed in the Organization Is the First Step

question 175

Multiple Choice

Identifying activities performed in the organization is the first step in developing activity-based product costs.Which of the following is a way to identify these activities?

• A)Asking employees what they do
• B)Analyzing industry averages
• C)Both asking employees what they do and analyzing industry averages
• D)Neither asking employees what they do nor analyzing industry averages

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Definitions:

Capital Balances

Capital balances reflect the amount of money that owners have invested in a company, including retained earnings and additional contributions.

Net Income

The net income of a business once all costs, such as operating expenses and taxes, are subtracted from its total earnings.

Income Sharing

An arrangement where generated income is distributed among participants or partners, often in proportion to their investment or contribution.

Capital Balances

The amount of equity in a company or partnership owned by shareholders or partners, respectively.