Using an Activity-Based Costing System (ABC) Enables a Firm to Calculate

question 32

Multiple Choice

Using an activity-based costing system (ABC) enables a firm to calculate overhead variances for:

• A) Sales volume and production volume.
• B) Spending and selling price.
• C) Each activity-based cost driver.
• D) Semi-variable overhead costs.
• E) Semi-fixed overhead costs.

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Definitions:

COGS

Stands for Cost of Goods Sold; it's the direct cost attributable to the production of the goods sold by a company, including both raw materials and labor costs.

Compensating Balance

A minimum bank account balance a borrower must maintain as part of a loan agreement.

Effective Annual Interest Rate

The real return on a savings account or any interest-bearing investment, taking into account the effect of compounding interest.

Interest Rate

The proportion of a loan charged as interest to the borrower, typically expressed as an annual percentage of the loan outstanding.