The Transaction Approach Is Difficult to Use Because

question 45

Multiple Choice

The transaction approach is difficult to use because

• A) transactions data are not typically as reliable as the data available for multiples analysis, especially when they are associated with a private firm.
• B) transactions involving the purchase or sale of an entire business in an industry tend to occur relatively infrequently and hence the data is not very timely.
• C) the terms of the transactions can be difficult to assess.
• D) All of the above.

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Definitions:

Labour Intensive

A process or industry that requires a large amount of manual labor relative to capital or machine usage.

Cost Driver

A factor that causes a change in the cost of an activity, directly affecting the cost of production or operations.

Cost Pool

A grouping of individual costs typically by department or service, from which cost allocations are made to products or services.

Cost Allocation

The process of assigning indirect costs to different departments, projects, or production processes within a company to ensure accurate product costing or project budgeting.