The Main Costs and Limitations of Activity-Based Systems Are ________

question 8

Multiple Choice

The main costs and limitations of activity-based systems are ________.

• A)measurements necessary to implement it
• B)cost associated with the new technology
• C)employees and manpower to implement it
• D)time associated with implementing the system
• E)measurements of managerial opinions and time

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Definitions:

Fixed Costs

Expenses that remain constant for a company irrespective of the level of production or sales.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity levels, providing a more relevant comparison of actual to budgeted performance.

Total Variable Cost

The sum of all variable costs (costs that change with production volume) involved in producing a specific level of output.

Activity Declines

A reduction in the level of operations, production, or business activities.