Indicate Whether Each of the Following Statements Is True or False.Information

question 39

Short Answer

Indicate whether each of the following statements is true or false.Information prepared using allocated costs often is used in evaluating the performance of managers.Information prepared using allocated costs should not be used in budgeting and resource allocation decisions within a company.A cost that is indirect with respect to one cost object may be direct with respect to other cost objects.Fixed costs generally are direct costs, and variable costs generally are indirect.An allocation base causes a cost to be incurred.

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Definitions:

Pollution Permits

Legal rights granted by governments to emit a specific amount of pollutants into the environment.

Corrective Tax

A tax designed to incentivize socially desirable behavior, often used to correct for the negative externalities of an action or consumption.

Coase Theorem

A principle that asserts that if private parties can bargain over the allocation of resources without cost, they can solve the problem of externalities on their own.

Externalities

Economic outcomes that impact third parties not directly involved, which can either be advantageous or disadvantageous.