Which of the Following Is a Cost Pool Used with the Activity-Based

question 42

Multiple Choice

Which of the following is a cost pool used with the activity-based costing method?

• A) total selling and administrative overheads
• B) direct material dollars
• C) total factory overheads
• D) production setups

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Definitions:

Variable Costing

A pricing approach that incorporates only variable manufacturing expenses into the cost of products, while considering fixed overhead costs as expenses for the period.

Variable Costing

An accounting method that only includes direct variable costs in product costing and decision-making processes.

Absorption Costing

A method of accounting that incorporates all costs associated with manufacturing, including direct materials, direct labor, and overhead expenses, into the product's cost.

Contribution Format

A presentation format for the income statement where costs are separated into variable and fixed categories, highlighting the contribution margin.