Regarding the Use of ABC Product Cost Information for Short-Term

question 69

Multiple Choice

Regarding the use of ABC product cost information for short-term decision making, which of the following is likely to be true?

• A) Flexible costs should be excluded from the computation of product cost
• B) Committed costs should be excluded from the computation of product cost
• C) ABC product cost information should not be used for most short-term decisions
• D) ABC product cost information cannot be used for decision making when there are constrained resources

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Definitions:

Parent Company

The corporation owning all or a majority of the voting stock of the other corporation.

Voting Stock

Shares that grant the shareholder voting rights in corporate decisions, typically involving the election of the board of directors.

Interest Revenue

Income earned from investments, loans, or other earning assets that yield interest over time.

Cash Dividends

Payments made by a corporation to its shareholders, usually as a distribution of profits in the form of cash.