A Key Reason for Using an ABC System Rather Than

question 38

Multiple Choice

A key reason for using an ABC system rather than a conventional cost system is because ABC assigns overhead costs:

• A)because they are indirect costs.
• B)more simply than a traditional cost system.
• C)based only on transaction drivers.
• D)to reflect differences required by different activities as well as customers.

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Definitions:

Crystal Ball

A forecasting and simulation software by Oracle that is used for predictive modeling, simulation, and optimization.

Critical Path

The longest sequence of activities in a project plan that must be completed on time for the project to finish by its due date.

Analytical Approach

A method of problem-solving that involves breaking down a complex issue into smaller components for easier understanding and solution formulation.

Variances

A measure of the dispersion indicating how much the values in a data set differ from the mean.