Before Using Activity-Based Costing (ABC), Managers Must Apply the Cost-Benefit

question 28

True/False

Before using activity-based costing (ABC), managers must apply the cost-benefit principle to the additional recordkeeping costs associated with ABC.

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Definitions:

Average Tax Rate

The ratio of the total amount of taxes paid to the taxpayer's total taxable income, indicating the share of income that is taken as tax.

Marginal Tax Rate

The percentage of tax applied to your income for each additional dollar of income.

Average Tax Rate

The proportion of total income that is paid in taxes, calculated by dividing the total taxes paid by the total income.

Income

Cash inflow, regularly obtained, as compensation for work or earnings from invested capital.