Which of the Following Statements Is True Regarding Activity-Based Costing

question 95

Multiple Choice

Which of the following statements is true regarding activity-based costing in administration?

• A) The principles of ABC are different when applied to administrative services.
• B) ABC in administration involves five steps.
• C) All cost drivers in an administrative system will be time-related.
• D) Activity-based costing for administrative services follows the same four-step procedure described for manufacturing.

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Definitions:

Services Gap

The discrepancy between customers’ expectations of service quality and their actual experiences.

Service Expectations

The preconceived notions or standards that customers have regarding the levels of service they should receive.

Perishability

A characteristic of a service.

Service Quality Dimensions

Aspects used to evaluate the quality of service, including reliability, responsiveness, empathy, assurance, and tangibles.