A Company's Management Accountant Is Trying to Improve the Way

question 37

Multiple Choice

A company's management accountant is trying to improve the way costs are allocated within the company.Currently,several corporate expenses are grouped together and labeled "overhead." If the accountant wanted to use activity-based costing (ABC) to help solve the problem,what should she do?

• A)She should try to map the departments' costs to their cost objects,and then charge each department based on those cost relationships.
• B)She should research how the company's competitors are allocating their costs,and then implement one of those strategies.
• C)She should look for bottlenecks within the production process,and try to eliminate them,thus reducing costs.
• D)She should examine the firm's value chain and apply target costing before adopting ABC.

---

Definitions:

Habituation

A psychological learning process wherein there is a decrease in response to a stimulus after being repeatedly exposed to it.

Newborn Infant

An infant who is within the first hours to a few weeks of life, characterized by rapid development and adaptation to the external world.

Habituation

The process of becoming accustomed to a stimulus after repeated exposure, leading to a decrease in response.

Babble

The sounds, speech, or nonsense talk uttered by infants as they begin to experiment with vocalizations.