To Guide Cost Allocation Decisions, the Fairness or Equity Criterion

question 84

Multiple Choice

To guide cost allocation decisions, the fairness or equity criterion is:

• A)the criterion often cited in government contracts
• B)superior when the purpose of cost allocation is for economic decisions
• C)used more frequently than the other criteria
• D)the primary criterion used in activity-based costing

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Definitions:

Auction Market

A market where buyers and sellers enter competitive bids simultaneously; stock exchanges are an example, where prices are determined by the highest bid and lowest ask.

New York Stock Exchange

One of the largest stock exchanges in the world, located in New York City, where stocks of publicly held companies are bought and sold.

Level 3 NASDAQ

The highest level of NASDAQ's trading information system that provides real-time access to the order book for NASDAQ stocks, allowing for the viewing of the best bid and ask prices and other detailed data.

Registered Market Makers

Entities authorized to both buy and sell specified securities on a continuous basis to maintain liquidity in the financial markets.