Using Activity-Cost Rates Rather Than Department Indirect-Cost Rates to Allocate

question 212

Multiple Choice

Using activity-cost rates rather than department indirect-cost rates to allocate costs results in different product costs when:

• A)different products use different resources in the same proportion.
• B)there are several homogeneous cost pools.
• C)different activities have the same cost-allocation base.
• D)a single activity accounts for a sizeable portion of department costs.

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Definitions:

Pressure Ulcers

Localized injury to the skin and/or underlying tissue, usually over a bony prominence, due to prolonged pressure or friction.

Mobility

Person's ability to move about freely.

Analgesic Medication

Medications formulated to alleviate pain without leading to unconsciousness.

Drainage

The natural or artificial removal of surface and sub-surface water from an area, or the process of removing fluid from a body cavity or wound.