An Activity-Based Costing That Is Designed for Internal Decision Making

question 47

Multiple Choice

An activity-based costing that is designed for internal decision making may not conform to generally accepted accounting principles.Which of the following would cause that to be the case?

• A) Direct manufacturing costs for labour and material are included.
• B) Indirect manufacturing costs for indirect materials are included.
• C) Some non-manufacturing costs are assigned to products.
• D) Indirect manufacturing costs for indirect labour are included.

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Definitions:

Retained Earnings

The portion of a company's profit that is held back and not paid out as dividends, used for reinvestment in the business or debt repayment.

Stock Split

A corporate action that increases the number of shares in a company by issuing more shares to current shareholders proportional to their ownership.

Market Value

The current value of an asset or company based on the price that it can be sold in the open market.

Paid In Surplus

The amount of money paid by investors for shares above their nominal value, representing additional contributed capital.