Which of the Following Measures Is Used by Traditional Costing

question 124

Multiple Choice

Which of the following measures is used by traditional costing systems as an allocation base for allocating overhead costs to the units produced?

• A) Volume-related activities.
• B) Batch-related activities.
• C) Product-related activities.
• D) Facility-related activities.

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Definitions:

Allowance for Doubtful Accounts

Allowance for doubtful accounts is an accounting provision that estimates the amount of receivables that may not be collectible due to customer defaults.

Contra-Revenue

An account on a company's income statement that deducts from gross revenue to arrive at net revenue, including returns, allowances, and discounts.

Bad Debts Expense

This represents the cost associated with accounts receivable that a company deems uncollectible and writes off as a loss.

Cost of Goods Sold

The direct costs attributable to the production of goods sold by a company, including material and labor costs.