Using a Department Indirect Cost Rate to Allocate Costs to Products

question 72

Multiple Choice

Using a department indirect cost rate to allocate costs to products will result in the same product costs as an ABC system if which of the following is true?

• A) if each activity within a department has the same cost allocation base, and the different products use resources from different activity areas in the same proportion
• B) if significant costs are incurred on different activities with different cost-allocation bases within a department, the different products use resources from different activity areas in different proportions
• C) if no single activity accounts for a significant fraction of a department's costs
• D) if information needed for an ABC is too expensive to develop and maintain accurately
• E) if each activity in a department has a separate costing system and uses different activity cost drivers

Understand the importance of SMART objectives in sales calls.

Comprehend how sales demonstrations can effectively move prospects through the mental steps towards purchase.

Understand the role of a salesperson in developing and maintaining customer relationships.

Grasp the concept of creative problem solving in sales and its impact on customer satisfaction.

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Definitions:

Sulfur Emissions

The release of sulfur compounds into the atmosphere, primarily from the burning of fossil fuels, which can cause environmental damage.

Coase Theorem

The proposition that even in the presence of externalities an economy can always reach an efficient solution as long as transaction costs are sufficiently low.

Transaction Costs

Expenses incurred when buying or selling goods and services, beyond the price of the goods themselves.

Sulfur Emissions

Gaseous emissions that include sulfur compounds, primarily sulfur dioxide, resulting from combustion processes and industrial activities.