Which of the Following Is True for Activity-Based Costing (ABC)

question 93

Multiple Choice

Which of the following is true for activity-based costing (ABC) ?

• A) ABC considers the real costs associated with each product.
• B) With ABC, the company can estimate all costs coming from the customer, less revenue.
• C) The tools of ABC can be used to conduct customer profitability analysis.
• D) It identifies the costs of products and services based on the revenue they generate.
• E) ABC allocates indirect costs in proportion to direct costs.

---

Definitions:

Foreign Investment

Foreign investment involves capital flows from one country to another, granting the investor ownership stakes in foreign companies or assets, aiming for future returns on the investments.

Creditors

Individuals or institutions that lend money or extend credit, expecting to be repaid, usually with interest.

Great Recession

A severe global economic downturn that occurred from late 2007 through mid-2009, marked by significant declines in GDP, high unemployment, and financial instability.

Trade Deficit

A situation where a country's imports exceed its exports during a specific period, leading to a negative balance of trade.