In an Activity-Based Costing (ABC) System, Cost Reduction Is Accomplished $\begin{array} {cc} { \text { All Cost Drivers } } & \text { Non value-added Activities } \\\end{array}$

question 7

Multiple Choice

In an activity-based costing (ABC) system, cost reduction is accomplished by identifying and eliminating: (CPA adapted)
$\begin{array} {cc} { \text { All Cost Drivers } } & \text { Non value-added Activities } \\\end{array}$
A. $\begin{array} {cc} & & \text { No } &&&&&&&&& \text { No } \\\end{array}$
B. $\begin{array} {cc} && \text { Yes } &&&&&&&&& \text { Yes } \\\end{array}$
C. $\begin{array} {cc} && \text { No } &&&&&&&&& \text { Yes } \\\end{array}$
D. $\begin{array} {cc} && \text { Yes } &&&&&&&&& \text { No } \\\end{array}$

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Definitions:

Gross Profit

The difference between sales revenue and the cost of goods sold, indicating the efficiency of a company in managing its production and labor.

Operating Expenses

Costs associated with running a company's core business activities but not directly tied to production.

Cost Of Goods Sold

The total of all costs used to create a product or service, which has been sold.

Beginning Inventory

The total worth of a company's inventory at the beginning of a financial period.