In the Activity Identification Stage of Implementing an Activity-Based Costing

question 53

Multiple Choice

In the activity identification stage of implementing an activity-based costing system, the greater the level of detail

• A)the less likely the company will be to have a net loss.
• B)the greater chance of misclassifying some costs and activities.
• C)the less likely to misclassify some costs and activities.
• D)the more likely the company will identify cost pools.

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Definitions:

Oligopoly

A distinct form of market where only a few companies have significant influence over industry prices and competition.

Herfindahl Index

A measure of market concentration used to determine the competitive landscape by summing the squares of the market shares of all firms in the industry.

Market Shares

The segment of a market dominated by a specific company or product, usually represented as a percentage.

Concentration Ratio

A measure of the total output produced in an industry by a given number of firms, usually the largest in the industry, indicating the level of market competition.