All of the Following Illustrate Purposes for Allocating Costs to Cost

question 94

Multiple Choice

All of the following illustrate purposes for allocating costs to cost objects EXCEPT to:

• A)provide information for economic decisions.
• B)determine a selling price the market will bear.
• C)motivate managers and employees.
• D)measure income and assets for reporting to external parties.

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Definitions:

Real Rate

The interest rate that has been adjusted to remove the effects of inflation, reflecting the true cost of borrowing.

Nominal Rate

The interest rate before adjustments for inflation, often referred to in the context of loans and savings.

Rate Of Inflation

The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling.

Supply And Demand

The relationship between the quantity of a commodity available and the desire for that commodity, determining its market price.