Activity Based Costing Attempts To

question 12

Multiple Choice

Activity based costing attempts to:

• A) correct the distortions built into product costing by the way that direct costs are allocated.
• B) correct the distortions built into product costing by the way that the learning curve is applied to direct labor costs.
• C) turn indirect costs into direct costs by tracking the cost drivers behind indirect costs.
• D) turn direct costs into indirect costs by tracking the cost drivers behind direct costs.
• E) introduce a new way to allocate direct costs that more accurately captures labor and material usage.

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Definitions:

Indispensable

Absolutely necessary or essential for the functioning or success of something.

Organizational Setting

An organizational setting refers to the environment or context within which an organization operates, including its culture, structure, and processes.

Input Factor

A resource, material, or component that is used in the production of goods or services.

Task Performance

The execution or completion of a specific job or duty, often measured in terms of efficiency or success.