What Sometimes Makes Implementation of Activity-Based Costing Difficult in Service

question 42

Multiple Choice

What sometimes makes implementation of activity-based costing difficult in service industries is

• A)the labelling of activities as value-added.
• B)identifying activities, activity cost plus, and cost drivers.
• C)that a larger proportion of overhead costs are company-wide costs.
• D)attempting to reduce or eliminate non-value-added activities.

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Definitions:

Perfectly Inelastic

A market situation where the quantity demanded does not change as the price changes.

Demand Curve

A graph showing the relationship between the price of a good or service and the quantity of that good or service that consumers are willing to buy at each price point.

Perfectly Elastic

Describes a situation in economics where a small change in price leads to an infinite change in quantity demanded or supplied.

Price Elasticity of Demand

A measure that calculates the change in the quantity demanded of a good in response to a change in its price.