Which of the Following Is True of Activity-Based Costing

question 12

Multiple Choice

Which of the following is true of activity-based costing?

• A) More cost pools
• B) Same base as traditional costing
• C) Less costly to use
• D) Eliminates arbitrary allocations

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Definitions:

NCI Adjustment

An adjustment in consolidated financial statements to reflect the share of equity interest that is not owned by the parent company's shareholders.

Retained Earnings

Retained earnings are the portion of a company's profits that are kept or retained by the company for reinvestment in its operations, rather than being distributed to its shareholders as dividends.

Tax Rate

The percentage at which an individual or corporation is taxed.

Depreciable Non-Current Asset

A long-term asset subject to depreciation, which systematically reduces its book value over its useful life to account for wear and tear.