Which of the Following Is True for Activity-Based Costing (ABC)

question 93

Multiple Choice

Which of the following is true for activity-based costing (ABC) ?

• A) ABC considers the real costs associated with each product.
• B) With ABC, the company can estimate all costs coming from the customer, less revenue.
• C) The tools of ABC can be used to conduct customer profitability analysis.
• D) It identifies the costs of products and services based on the revenue they generate.
• E) ABC allocates indirect costs in proportion to direct costs.

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Definitions:

Operator Training

The process of teaching operators to run machinery or systems efficiently and safely.

Maintenance

The activities undertaken to keep an asset in working condition or restore it to proper condition.

Number Of Calls

Represents the total amount of telephone calls made or received by a person or organization within a specific period.

Number Of Operators

The total count of individuals or machines operating within a given process or system at a specific time.