Which of the Following Is True of Refinement of a Costing

question 134

Multiple Choice

Which of the following is true of refinement of a costing system?

• A) While refining a costing system, companies should identify as many indirect costs as is economically feasible.
• B) A homogeneous cost pool will use multiple cost drivers to allocate costs.
• C) It reduces the use of broad averages for assigning the cost of resources to cost objects.
• D) It is likely to yield the most decision-making benefits when direct costs are a high percentage of total costs.

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Definitions:

Shelf Space

The amount of space available on store shelves allocated to display and sell products.

Sales Per Square Foot

A metric used in retail to measure the amount of revenue generated per square foot of sales space.

Product Quality

The level of excellence of a product, measured by its durability, reliability, and performance against specified standards.

Open Innovation

A business model that encourages companies to use external as well as internal ideas and paths to market while advancing their technology.