For Which One of the Following Reasons Is the Calculation

question 109

Multiple Choice

For which one of the following reasons is the calculation of overhead variances in conjunction with an activity-based cost (ABC) system desirable from the standpoint of management?

• A) The resulting cost-management system is currently required by generally accepted accounting principles (GAAP).
• B) Such a system would be consistent with the goal of managing activities rather than cost.
• C) Such a system is likely to be less costly to design and implement.
• D) Far fewer variances would likely be expected under such a system.
• E) Conventional systems, though appropriate for a manufacturing setting, are not applicable to the service sector.

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Definitions:

Contractions

The tightening and releasing of the muscles of the uterus during childbirth or to indicate the onset of labor.

Anesthetics

Anesthetics are substances used to induce anesthesia, a state of temporary loss of sensation or awareness, typically used during surgical procedures.

Childbirth

The process of giving birth to a baby, including labor and delivery.

Placental Membrane

A thin tissue layer in the placenta that separates the mother's blood from the fetus's blood, allowing exchange of materials but not direct blood mixing.