Which One of the Following Is an Advantage to Open

question 18

Multiple Choice

Which one of the following is an advantage to open account financing?

• A)high risk
• B)seller must finance production
• C)increased risk from currency controls
• D)no customer resistance

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Definitions:

Departmental Overhead Rate

A rate used to allocate overhead costs to specific departments, calculated based on the relationship between indirect costs and activity level.

Own Allocation Base

Refers to the specific denominator that a company chooses to allocate indirect costs to different cost objects, based on their usage or benefit from those costs.

Plantwide Overhead Rate

A single overhead absorption rate used throughout a manufacturing facility to allocate overhead costs to products.

Volume-Based Measures

Metrics that quantify outcomes or activities based on the amount or volume of production, sales, or other business operations.