Which of the Following Is True

question 140

Multiple Choice

Which of the following is true?

• A)Overhead costs are often affected by many issues and are frequently too complex to be explained by any one factor.
• B)The departmental overhead rate is not usually based on measures closely related to production volume.
• C)The departmental overhead rate is most accurate in assigning overhead costs that are not driven by production volume.
• D)Allocated overhead costs will be the same no matter which allocation method is used.
• E)When cost analysts are able to logically trace cost objects to costs,costing accuracy is improved.

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Definitions:

Operating Activities

Business activities related directly to the production, sale, and delivery of a company's products or services, often reflected in its cash flow.

Fixed Asset

Long-term tangible assets held for business use and not expected to be converted to cash in the coming fiscal year, such as buildings, machinery, and equipment.

Direct Method

An approach to preparing the cash flow statement that lists actual cash inflows and outflows from operating activities.

Operating Activities

The day-to-day actions and transactions that relate to the primary operations of a business, such as sales and purchasing.