Which of the Following Best Explains the Main Advantages of Time-Driven-Activity-Based

question 73

Multiple Choice

Which of the following best explains the main advantages of time-driven-activity-based costing for services over the use of conventional ABC?

• A) The number of services can more easily be expanded than under conventional ABC, since costs are assigned to unused capacity.
• B) Theoretical capacity, used in this type of costing, allows service companies a better method to assess quality control than does conventional ABC.
• C) Time-based resource and activity data is easy to collect and practical capacity is used by time-driven-activity-based costing.
• D) The number of line items on a service's bill is minimized and practical capacity is used by time-driven-activity-based costing.
• E) This type of costing allows service companies better information since their objectives when using ABC are different than those of manufacturing firms.

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