For Dehli Inkstone,is It Worth Implementing a Full-Fledged ABC System,based

question 5

Multiple Choice

For Dehli Inkstone,is it worth implementing a full-fledged ABC system,based upon the findings for these two products?

• A)No,for Standard the cost difference between using machine hours and ABC is less than 30 cents per unit,so adoption of the ABC system is not cost-beneficial
• B)Yes,all of the single-base allocation systems over cost the Masterpiece
• C)No,for Masterpiece the cost difference between using labor hours and ABC is less than 40 cents per unit,so adoption of the ABC system is not cost-beneficial
• D)No,the ABC system has failed to reduce total overheads
• E)No,the proportions of the different inputs consumed by each product are not sufficiently different to make ABC worthwhile

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Definitions:

Competitive

A market characteristic where multiple firms or entities vie for customers, influencing prices, quality, and services in the process.

Market Price

Market Price is the current price at which a good or service can be bought or sold in a marketplace.

Competitive Price-Taker

A market participant who must accept the prevailing market prices because they have no influence over those prices due to their small market share.

Average Total Cost

The total cost of production divided by the quantity of output produced, representing the average cost per unit of output.