Which of the Following Statements Is True of ABC Systems

question 79

Multiple Choice

Which of the following statements is true of ABC systems?

• A) ABC systems are time-driven cost systems.
• B) ABC systems classify some direct costs as indirect costs and some indirect costs as direct costs.
• C) ABC systems provide valuable information to managers beyond accurate product costs.
• D) ABC systems assume all costs are variable costs.

---

Definitions:

Tax Advantage

A tax advantage refers to the economic bonus that applies to certain accounts or investments that are exempt from taxation, or taxed at a lower rate.

Rising Prices

A situation where the general level of prices for goods and services increases over a period, indicative of inflation.

LIFO Liquidation

The process of reducing inventory using the Last-In, First-Out (LIFO) method, which can impact the cost of goods sold and taxes during times of inflation.

SEC

The Securities and Exchange Commission is an agency of the U.S. government tasked with enforcing federal laws pertaining to securities and overseeing the securities industry, including stock and options exchanges.