Which of the Following Statements Is True

question 136

Multiple Choice

Which of the following statements is true?

• A) One of the lessons learned from activity-based costing (ABC) is that all costs are really a function of volume.
• B) The primary purpose of the plantwide and department allocation methods is allocating direct costs to specific products.
• C) A problem with activity-based costing (ABC) is that it requires more recordkeeping than other methods.
• D) Direct cost allocations are required for the plantwide and department allocation methods.

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Definitions:

Expendable Trust Fund

A fund consisting of assets held in a trust that can be used up or expended, typically for designated purposes as per the trust's terms.

Modified Accrual Accounting

An accounting method that combines aspects of both accrual and cash accounting, recognizing revenues when they are earned and expenses when they are incurred or paid.

Long-Term Debt

Financial obligations of a company that are due more than one year in the future, often including bonds, mortgages, and leases.