Answered: 1.An activity that has a direct…

1.An activity that has a direct cause-effect relationship with the resources consumed is a(n) Group of answer choices cost driver overhead rate cost pool product activity

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter2: Financial Reporting: Its Conceptual Framework

Section: Chapter Questions

Problem 22GI

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Question

1.An activity that has a direct cause-effect relationship with the resources consumed is a(n)

Group of answer choices

cost driver

overhead rate

cost pool

product activity

Definition Definition Indirect costs incurred while producing goods or services. Overhead costs cannot be directly attributed to products or services. Overhead includes indirect material cost, indirect labor cost, rent, utilities expenses, and depreciation. Since these costs directly affect the profitability of a company, managing overhead becomes an important task for management.

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