If a Company Allocates Costs of Central Services to Products

question 68

Multiple Choice

If a company allocates costs of central services to products based on sales,________ should be used as the allocation base.

• A) actual usage
• B) estimated usage
• C) actual sales
• D) budgeted sales

Learn about the role and functions of EAI systems.

Know the interorganizational capabilities of ERP systems.

Understand the correction of communication lacks among FAIS by specific designs.

Grasp the procurement process in enterprises.

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Definitions:

Marginal Revenue

The increment in revenue realized from the sale of an additional unit of a product.

Market Price

The current price at which a good or service can be bought or sold in an open and competitive market.

Purely Competitive Market

A market structure characterized by a large number of buyers and sellers, homogeneous products, and free entry and exit, leading to price taking behavior.

Purely Competitive Firm

A company operating in a market where there are many buyers and sellers offering homogeneous products, leading to the inability to influence market price.