An Activity Based Costing (ABC) System Plays an Important Role

question 32

Multiple Choice

An Activity Based Costing (ABC) system plays an important role in setting a target cost because

• A)ABC encourages product designers to charge higher sales prices.
• B)ABC encourages product designers to use a traditional product costing system.
• C)ABC allows product designers to attempt cost improvement in particular activities.
• D)ABC allows product designers to replace the manufacturing system.
• E)ABC allows product designers to focus on how to increase the costs of manufacturing.

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Definitions:

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