A Difference in GAAP-Based Product Costing and Activity-Based Costing Is

question 144

Multiple Choice

A difference in GAAP-based product costing and activity-based costing is that under activity-based costing

• A)all costs are classified as product and period costs, whereas under GAAP they are classified by behavior.
• B)sales less cost of goods sold is classified as gross profit, whereas under GAAP this subtotal is titled contribution margin.
• C)selling and administrative costs are allocated to products if they are incurred to provide resources that are consumed by unit-level, batch-level, or product-level activities.
• D)all costs are traceable, whereas in GAAP-based costing some costs are allocated.

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Definitions:

Proxy Fight

A battle for control of a company waged by a group of shareholders against the current management, typically requiring the solicitation of proxies from other shareholders.

Board Members

Individuals elected by shareholders to oversee the management and make key decisions for a corporation.

Shareholders

Individuals or institutions that own one or more shares of stock in a public company, thereby having a partial ownership stake in the company.

Common Stock

Equity securities that represent ownership in a corporation, giving shareholders voting rights and a share in the company's profits through dividends.