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

question 92

Multiple Choice

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

• A) There is a clear cause-and-effect relationship between costs and the cost driver in the long run.
• B) There is no variety of cost drivers and cost pools.
• C) The system focuses on activities in together and not on individual activities.
• D) A single cost driver should be identified for all the activities.

---

Definitions:

Underlying Security

A stock, bond, currency, or commodity on which an option or futures contract is based.

Collar

An options strategy that brackets the value of a portfolio between two bounds.

Net Outlay

The total amount invested or spent, minus any returns or reimbursements.

Options Strategy

A plan or approach for trading options that can involve buying and/or selling one or more options that differ in one or more of the options' variables.