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:

Valuation Allowance

An allowance made against deferred tax assets that are not expected to be realized in full or in part.

Future Benefits

The expected gains or returns from an investment or policy, often used in evaluating its worth.

Accrued Product Warranty

A liability representing the estimated costs of fulfilling product warranty obligations.

Pre-tax Book Income

The income of a company before taxes are deducted, as reported in its financial statements.