Activity-Based Costing (ABC)can Eliminate Cost Distortions Because ABC

question 109

Multiple Choice

Activity-based costing (ABC) can eliminate cost distortions because ABC:

• A)develops cost drivers that directly link the activities performed to the products manufactured.
• B)establishes multiple cost pools.
• C)employs capacity-related cost drivers.
• D)recognizes interactions between different departments in assigning overhead costs.

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Definitions:

Taxable Property

Property subject to taxation, such as real estate, vehicles, and personal possessions, depending on jurisdictional tax laws.

Property Taxes

Property taxes are levies on real estate assessed based on the property's value. They are a major source of revenue for local governments, funding public services like education and infrastructure.

Excise Tax

An excise tax is a tax imposed on the sale of specific goods and services, such as tobacco, alcohol, and gasoline, often levied at the time of purchase.

Demand Curves

Graphical representations showing the relationship between the price of a good and the quantity demanded.