Which of the Following Statements Is True of Activity-Based Costing

question 142

Multiple Choice

Which of the following statements is true of activity-based costing?

• A) In activity-based costing, direct labor-hours is always the best allocation base to allocate all non-manufacturing indirect costs.
• B) Activity based costing is more suited to companies with high product diversity than companies with single product line.
• C) Activity based costing broadly averages or spreads the cost of resources uniformly to cost objects such as products or services.
• D) The main advantage of activity-based costing over peanut-butter costing is the accurate distribution of all direct costs to the products.

---

Definitions:

Persons

Legal entities that include human beings as well as corporates and other entities recognized by law as having rights and obligations.

New York Convention

An international agreement governing the use of arbitration as a method of resolving private international disputes.

International Agreement

A legally binding contract between sovereign nations governed by international law.

Private International Disputes

Conflicts that arise between private parties that cross international borders, often requiring the application of foreign law.