A Possible Solution to Overcome Distortions Caused by Unit Level

question 169

Multiple Choice

A possible solution to overcome distortions caused by unit level rates is

• A)assign costs by multiplying activity rates times the amount of activity consumed.
• B)calculate individual rates for each activity with activity drivers.
• C)increase the number of rates used that reflect the diverse activity and nonunit overhead drivers.
• D)all of these.

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Definitions:

Dishonored Checks

Checks that a bank refuses to pay or cash, typically because the account holder has insufficient funds.

Dishonor

In the context of finance, refers to the refusal or inability of a party to pay a debt when it is due.

Instrument

A formal legal document, such as a contract, will, promissory note, or warrant, that establishes rights, privileges, or liabilities.

Promissory Note

A financial instrument that contains a written promise by one party to pay another party a definite sum of money, either on demand or at a specified future date.