The Activity-Based Costing System

question 47

Multiple Choice

The activity-based costing system

• A)is more appropriate method of cost accounting for rigid hierarchical organizations.
• B)effectively departmentalizes an organization based on its core functions such as human resources, purchasing, and maintenance.
• C)provides a more accurate picture of how costs should be charged to products and services.
• D)assumes that organizations are bureaucratic "machines" that can be separated into component functions.
• E)fails to allocate costs across business processes and is less effective than traditional methods of cost accounting.

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Definitions:

Divestitures

The process of selling off subsidiary business interests or investments as a strategic move for a company.

Proxy Solicitation

The process of gathering votes from shareholders to vote on corporate matters when they cannot attend the shareholder meeting in person.

Tender Offer

An offer made by an investor or acquiring company to purchase shares from the shareholders of a company at a specific price for a certain period.

Sale of Stock

This refers to the process of selling shares of a company to investors; this can be done via public offerings or through private sales.