Which of the Following Is a Way a Company Can

question 148

Multiple Choice

Which of the following is a way a company can use information about activities to manage its operations?

• A)Activity-based costing and activity-based budgeting
• B)Activity-based management and activity-based budgeting
• C)Activity-based budgeting and activity-based engineering
• D)Activity-based costing, activity-based management, and activity-based budgeting

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Definitions:

Allocation Bases

Allocation bases are criteria or standards used to distribute costs among different departments, products, or activities in a fair and logical manner.

Indirect Costs

Indirect costs are expenses not directly linked to a specific product or service, such as administrative salaries, utilities, and rent. These costs are essential for the overall operation but not traceable to a single item.

Department Income Statements

Financial statements that show the revenue, expenses, and profit or loss of individual departments within an organization.

Preparation Steps

The planned actions or tasks that are performed in order to prepare for an activity or process.