Activity Based Costing

question 8

Multiple Choice

Activity Based Costing

• A) is useful for distributions centers but not customers.
• B) can be applied to customer segmentation.
• C) is too sophisticated for many applications.
• D) is a very new management science.

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Definitions:

Accounting Break-even Point

The point at which total costs and total revenues are equal, resulting in no net loss or gain.

Fixed Cost

are business expenses that remain constant regardless of the level of production or sales, such as rent or salaries.

Depreciation

The process of allocating the cost of tangible assets over their useful lives, reflecting wear and tear or obsolescence.