(Appendix 5B)Why Would an Activity-Based Costing System That Is Designed

question 17

Multiple Choice

(Appendix 5B) Why would an activity-based costing system that is designed for internal decision making NOT conform to generally accepted accounting principles?

• A) Some manufacturing costs (i.e.,the costs of idle capacity and organization-sustaining costs)will not be assigned to products.
• B) Some non-manufacturing costs are assigned to products.
• C) First-stage allocations may be based on subjective interview data.
• D) All of the above.

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Definitions:

Milgram Experiment

A psychological experiment conducted by Stanley Milgram in the 1960s to study obedience to authority, where participants were instructed to administer electric shocks to another person.

Stanford University Prison Experiment

A psychological study conducted by Philip Zimbardo in 1971 at Stanford University, where students were assigned roles of prisoners and guards to explore the effects of perceived power.

Generalization

Drawing a conclusion about a certain characteristic of a population based on a sample from it.

Logical Support

The provision of reasons or evidence to justify a claim or argument.