Which of the Following Would Probably Be the Most Accurate

question 62

Multiple Choice

Which of the following would probably be the most accurate measure of activity to use for allocating the costs associated with a factory's purchasing department?

• A)Machine-hours
• B)Direct labor-hours
• C)Number of orders processed
• D)Cost of materials purchased

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Definitions:

Investment Allowance

Investment allowance is a tax incentive that allows businesses to deduct a certain percentage of their investment in assets from their taxable income.

Operating Revenue

Income generated from a company's core business activities, excluding income from investments or secondary sources.

Tax Rate

The percentage at which an individual or corporation is taxed, which can vary depending on income level, type of business, or legal jurisdiction.

Tax Effect

The impact of tax laws on the financial performance of a business, influencing its net income and cash flow.