If a US-Based Company Has a Subsidiary in Germany, and the German

question 54

Multiple Choice

If a U.S.-based company has a subsidiary in Germany, and the German subsidiary imports components from Britain, the British pound would most likely be considered (from the standpoint of the German subsidiary)

• A) the local currency.
• B) a foreign currency.
• C) the functional currency.
• D) the reporting currency.

Differentiate between plantwide overhead rates and activity-based costing rates.

Analyze the distribution of resource consumption across activity cost pools using ABC data.

Understand the role of direct labor-hours in the calculation of plantwide overhead rates versus ABC system rates.

Understand the fundamentals of activity-based costing (ABC) and its application in assigning overhead costs to products and customers.

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Definitions:

Expense Deduction

An expenditure that is subtracted from gross income to reduce the amount of income that is subject to taxation.

Airfare

The cost or price of a ticket for travel by airplane.

Social Security Tax Rate

The tax rate applied to both employers and employees to fund the Social Security program.

Income Limit

The maximum amount of income that allows for eligibility for certain tax benefits or programs.