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:

Exam Rooms

A designated space where medical examinations are conducted by healthcare providers.

Lab Areas

Designated spaces or rooms equipped for scientific experiments, research, and teaching in various scientific fields.

Autoclave

A machine used for sterilization by applying high pressure and steam.

Front Desk

The reception area of an office, hotel, or other business where guests are greeted and administrative tasks are handled.