Consider the Following Statements About Activity-Based Costing and Its Use

question 68

Multiple Choice

Consider the following statements about activity-based costing and its use in pricing:
I. A company that uses target costing generally would have little need for activity-based costing.
II. Companies that use cost-plus pricing methods would have little need for activity-based costing.
III. The use of activity-based costing will often lead to better pricing decisions by managers.
Which of the above statements is (are) true?

• A) I only.
• B) II only.
• C) III only.
• D) I and III.
• E) I, II, and III.

---

Definitions:

Effective Tools

Instruments or methodologies that have been proven to efficiently accomplish a task or achieve a specific outcome.

Union Contract

A legally binding agreement between a union representing employees and their employer, outlining wages, working conditions, and other employment terms.

Grievance

Formal complaint filed by an employee or a union that management is violating some provision of a union contract.

Mediation

Dispute resolution process that uses a third party, called a mediator, to make recommendations for settling labor–management differences.