Activity-Based Costing (ABC) Can Eliminate Cost Distortions Because ABC Systems

question 11

Multiple Choice

Activity-based costing (ABC) can eliminate cost distortions because ABC systems ________.

• A) establish a cause-and-effect relationship with the activities performed
• B) use single cost pool for all overhead costs, thereby enabling simplicity
• C) use a broad average to allocate all overhead costs
• D) never consider interactions between different departments in assigning support costs

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Definitions:

Authority

The power or right to give orders, make decisions, and enforce obedience, often associated with a particular position in a government, organization, or institution.

Politically Conservative

Favoring traditional views and values, tending to oppose change in political and social systems.

Intolerant Of Ambiguity

A personality trait characterized by a lack of tolerance for uncertainty or situations that are not clear-cut.

Racist

An individual who believes in the superiority of one race over others and may discriminate or express prejudice based on racial characteristics.