If a Budgeted Activity Base Is Used as the Base

question 31

Multiple Choice

If a budgeted activity base is used as the base in cost allocation,each department's cost allocation will be predictable,and not influenced by the:

• A)actual total cost.
• B)change in activity.
• C)variations from budget.
• D)errors in calculations.
• E)actual usage in other departments.

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Definitions:

Real Return

The return on an investment after adjusting for inflation, reflecting the actual purchasing power of the amount returned.

Net Capital Outflow

The skew in investment patterns between domestic entities investing abroad and foreign entities investing domestically.

Factories

Are industrial sites where goods are produced or processed, typically utilizing machinery and labor.

Exchange Rate

The price of a currency in terms of another, establishing how much of the first currency is equivalent to the second during exchange.