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:

Expected Return

The probable return on an investment, considering all possible outcomes and their probabilities, representing the average of all possible returns.

Beta

A measure of the volatility, or systematic risk, of a security or portfolio in comparison to the market as a whole.

Standard Deviation

Standard deviation measures the amount of variation or dispersion of a set of values, indicating the volatility or risk associated with a particular investment.

Beta

A measure of a stock's volatility in relation to the overall market; a beta greater than one indicates greater volatility.