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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