Activity-Based Budgeting Would Separately Estimate ________

question 145

Multiple Choice

Activity-based budgeting would separately estimate ________.

• A) the cost of overhead for a department
• B) a plant-wide cost-driver rate
• C) the cost of a setup activity
• D) All of these answers are correct.

---

Definitions:

Variable Factory Overhead

Costs in a factory that vary with the level of production output, such as supplies and utilities used in the manufacturing process.

Transfer Pricing

The setting of prices for transactions between affiliated entities within the same multinational corporation, affecting taxation and financial reporting.

Factory Overhead

All indirect costs associated with manufacturing, such as utilities, rent, and maintenance, excluding direct materials and direct labor.

Cost-Reimbursement Contract

A type of contract where the purchaser agrees to pay the supplier for all actual costs incurred plus a fee or profit.