In the Activity Identification Stage of Implementing an Activity-Based Costing

question 136

Multiple Choice

In the activity identification stage of implementing an activity-based costing system,defining activities in greater detail will

• A)require more monitoring.
• B)lessen the change of misclassifying some costs and activities.
• C)both require more monitoring and lessen the change of misclassifying some costs and activities.
• D)neither require more monitoring nor lessen the change of misclassifying some costs and activities.

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Definitions:

Lump Sum

A single payment made at a particular time, as opposed to several smaller installments.

Future Value

The value of an investment at a specified date in the future that accounts for a specified rate of interest or rate of return.

Interest Rate

The amount charged by a lender to a borrower for the use of assets expressed as a percentage of the principal.

Trust Fund

A legal entity set up to hold property or assets for the benefit of another party, often managed by a trustee.