Which of the Following Costing Methods Is a Before-The-Fact Simplification

question 50

Multiple Choice

Which of the following costing methods is a before-the-fact simplification method that eliminates the first stage of assigning costs to activities of activity-based costing (ABC) system and dramatically simplifies the assignment of cost of resources to activities?

• A)Functional-based costing
• B)Duration-based costing
• C)Absorption costing
• D)Batch-level costing

---

Definitions:

Positive Externality

A benefit that affects a party who did not choose to incur that benefit.

Externalities

Economic side effects or consequences of industrial or commercial activity that affect other parties without being reflected in the costs of the goods or services involved.

Injunctions

Court orders requiring an individual, group, or organization to do or refrain from doing a particular act.

Externalities

Externalities are indirect effects of economic activities on third parties, which can be either positive or negative.