Which of the Following Should Be the Main Determinant for Selection

question 67

Multiple Choice

Which of the following should be the main determinant for selection of the allocation method for long-term operational assets?

• A)The method that best matches the pattern of asset use.
• B)The method that is most convenient to compute.
• C)The method that provides the greatest return to the stockholders.
• D)The method that provides the best tax advantage.

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Definitions:

Designing

The process of planning and creating something with a specific function or intention in mind.

Product-level Activity

Product-level activity refers to tasks or operations directly associated with a specific product, impacting its cost and production process.

Facility-level Activity

Activities and costs associated with maintaining the physical structure and overall operations of a facility, not directly tied to specific products.

Plantwide Overhead Rate

A single overhead rate calculated by dividing the total manufacturing overhead costs by the total amount of a common base (like direct labor hours or machine hours) used across an entire plant.