An Activity-Based Costing System Would Be of Less Value to a Business

question 47

True/False

An activity-based costing system would be of less value to a business making a single product than it would be for a company with multiple products.

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Definitions:

Significant Component

An essential part or element of a larger system or structure in various contexts, crucial for its operation or understanding.

Vertical Analysis

A technique for analyzing financial statements where every item within the three key categories (assets, liabilities, and equity) on a balance sheet is expressed as a percentage of the total category value.

Administrative Expense

Expenses related to the general operation of a business, including salaries of non-sales personnel, rent, and utilities.

Net Sales

Net sales of a company, calculated by deducting returns, discounts, and allowances for damaged or missing products from its gross sales.