Ideally,if a Department Has More Than One Cost-Allocation Base for Overhead

question 121

Multiple Choice

Ideally,if a department has more than one cost-allocation base for overhead costs,it should ________.

• A) use only one cost-allocation base with the highest amount of overhead costs
• B) use only two cost-allocation bases with the highest amount of overhead costs
• C) accumulate a separate cost pool for each cost-allocation base and put the overhead costs into the appropriate cost pool
• D) determine the budgeted overhead rate using the budgeted overhead costs and the budgeted amount of only one cost driver

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Definitions:

Indifference Map

A graph showing a set of indifference curves, illustrating combinations of goods or services among which a consumer is indifferent.

Total Utility

The full satisfaction experienced when consuming an exact aggregate quantity of a good or service.

Equal-Elevation Lines

Contour lines on a map representing points of equal elevation above a reference level, typically sea level.

Total Utility

refers to the total satisfaction gained from consuming a particular quantity of goods or services.