E-PolyLearning

16. The hierarchy which is based on different types of cost allocation and drivers, to categorize cost pool activity is classified as
a. cost hierarchy
b. price hierarchy
c. activity hierarchy
d. purpose hierarchy
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Answer: (a).cost hierarchy

17. The product which requires large amount of resources, but incur low per unit cost is classified as
a. product under costing
b. product over costing
c. expected under cost
d. expected over cost
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Answer: (a).product under costing

18. The costs of undertaken activities is to support individual products and are known as
a. expected sustaining
b. input sustaining
c. output sustaining
d. product sustaining costs
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Answer: (d).product sustaining costs

19. If the net initial investment is $985000, returned working capital is $7500, then an average investment over five years will be
a. $596,300
b. $485,300
c. $496,250
d. $486,250
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Answer: (c).$496,250

20. If an initial investment is $765000, the payback period is 4.5 years, then increase in future cash flow will be
a. $5,645,000
b. $6,442,500
c. $3,442,500
d. $5,442,500
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Answer: (c).$3,442,500

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