To Identify Costs That Relate to a Specific Product,what Allocation

question 39

Multiple Choice

To identify costs that relate to a specific product,what allocation base should be chosen?

• A)One that does not have a cause and effect relationship.
• B)One that has a causal relationship.
• C)One that considers variable costs but not fixed costs.
• D)One that considers direct materials and direct labor but not factory overhead.

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Definitions:

Deep Discount

The sale of an asset or product at a price significantly below its usual or intrinsic value.

Coupon Payments

Periodic interest payments made to bondholders, typically on a semi-annual basis, based on the coupon rate of the bond.

Municipal

Relating to a city or town or its governing body.

Sinking Fund

A reserve fund established by a company to set aside revenue over time for the purpose of paying off debt or replacing a major asset in the future.