Activity-Based Costing Systems

question 44

Multiple Choice

Activity-based costing systems:

• A) use a single, volume-based cost driver.
• B) assign overhead to products based on the products' relative usage of direct labor.
• C) often reveal products that were under- or over-costed by traditional costing systems.
• D) typically use fewer cost drivers than more traditional costing systems.
• E) have a tendency to distort product costs.

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Definitions:

Final Selling Price

The ultimate price at which a product or service is sold to the consumer, including all taxes, fees, and discounts applied.

Discounting

The practice of reducing the selling price of goods or services, typically to stimulate sales or clear out inventory.

Ego Psychologists

Ego psychologists study the role of the ego in development and the ways it adapts to reality, managing the conflicts between the id, ego, and superego as outlined in Freudian psychological theory.

Conscious Thought

The process by which individuals are aware of and can think about their thoughts, feelings, and beliefs.