If a Firm Has Implemented Activity-Based Procedures for Home Office

question 65

Multiple Choice

If a firm has implemented activity-based procedures for home office expenses, it will

• A) allocate all home office expenses on the basis of sales revenues.
• B) allocate all home office expenses to homogeneous cost pools.
• C) allocate the costs in a pool using a predetermined rate per unit of activity.
• D) both a and b.

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Definitions:

Tax Credit

A direct reduction in tax liability, not merely a reduction in taxable income, that decreases the total tax bill directly.

Interest Rate

The cost of borrowing money or the return on saving, expressed as a percentage of the amount borrowed or saved.

Exchange Rate

The value of one currency for the purpose of conversion to another, indicating how much of one currency can be exchanged for another.

Demand For Loanable Funds

The desire for borrowing money, driven by individuals, businesses, and governments, influenced by interest rates and economic conditions.