Volume-Based Costing Allocates Indirect Product Costs Based on the Volume

question 10

Multiple Choice

Volume-based costing allocates indirect product costs based on the volume of output,using such allocation bases as direct labor hours,machine hours,or the amount of direct material used in the production process.Activity-based costing (ABC) has consistently shown that Volume-based costing ___________ the cost of high volume products and ______________ the cost of low volume products.

• A)Option a
• B)Option b
• C)Option c
• D)Option d

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Definitions:

Simple Consideration

The minimal requirement of value that must be exchanged between parties entering into a contract, for the contract to be considered valid.

Indorsement

The act of signing the back of a negotiable financial instrument, thereby making it payable to someone other than the named holder.

Signature

A person's name written in a distinctive way as a form of identification in authorizing a document.

Check

A written, dated, and signed instrument that directs a bank to pay a specific sum of money to the bearer or a designated entity from the drawer's account.