An Activity Cost Pool

question 64

Multiple Choice

An activity cost pool:

• A) is a combination of a number of activities.
• B) must be made up of activities at the same level.
• C) can only be used at the product level.
• D) is a combination of a number of activities AND must be made up of activities at the same level.

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Definitions:

Responsibility Centre

A unit within an organization under the management's control, accountable for specific activities and associated costs, revenues, or investments.

Investment Centre

A business unit or segment which is responsible for its own revenues, expenses, and assets, and whose performance is measured by its return on investment.

Profit Centre

A profit centre is a distinct business unit or department within an organization that is responsible for generating its own revenue and managing its own costs to drive profitability.

Credit Sales

Sales made by a business where the amount is owed by the buyer for a period of time before payment is required.