A Major Disadvantage of Activity-Based Costing (ABC)in a Governmental Setting

question 56

True/False

A major disadvantage of activity-based costing (ABC)in a governmental setting is the very limited number of activities for which it can be used.

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Definitions:

Perfectly Competitive Firm

A business operating in a market where no single firm can influence the market price or market conditions, facing many competitors and selling identical products.

Long Run

A period sufficient for all inputs to production, including capital, to be varied.

Long Run

A period of time sufficient for all markets to adjust to changes, including the reallocation of resources and entrance or exit of firms in an industry.

Perfectly Competitive Industries

Markets where no single buyer or seller has the power to influence prices, and where products are homogeneous and information is freely available.