Which of the Following Is a Trait of an Activity-Based

question 18

Multiple Choice

Which of the following is a trait of an activity-based cost management system?

• A)allocation-intensive
• B)narrow and rigid product costing
• C)non-unit-based drivers
• D)focus on managing costs

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Definitions:

Appraisal Cost

The cost associated with evaluating or inspecting products or materials to ensure they meet the necessary quality standards.

Prevention Cost

Costs incurred to prevent defects in products or services, part of Quality Costs.

Internal Failure Costs

Costs incurred when a product or service does not meet quality standards before being delivered to the customer, including scrap and rework expenses.

Product Cost Method

An accounting method that determines the cost to produce a product by summing the costs of raw materials, direct labor, and allocated overhead.