Which of the Following Is True with Activity Based Cost

question 53

Multiple Choice

Which of the following is true with activity based cost accounting?

• A) Activity-based costing ignores the allocation of marketing and distribution costs.
• B) Activity-based costing is more likely to result in major differences from traditional costing systems if the firm manufactures only one product rather than multiple products.
• C) The focus is on activities that account for a sizable fraction of indirect costs .
• D) Chances of product-cost cross-subsidization are higher in activity-based costing compared to traditional costing systems.

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Definitions:

Light Users

Consumers who use a product or service infrequently and in lower quantities compared to heavy users, often targeted differently in marketing strategies.

Urban College

An educational institution located in a city environment, often providing higher education opportunities with an emphasis on serving the local urban community.

Marketing Research

The process of gathering, analyzing, and interpreting data about a market, including competitors and consumers.

Implementing

The act of putting plans, strategies, or policies into action or effect.