Which of the Following Is True Regarding Activity-Based Costing (ABC)

question 26

Multiple Choice

Which of the following is true regarding activity-based costing (ABC) ?

• A) The benefits of using ABC always outweigh its limitations.
• B) The lower the proportion of overhead costs as compared to direct materials and direct labour costs,the more likely a company will benefit by using ABC.
• C) Companies with a high-proportion of non-unit-level costs should rarely use ABC.
• D) High measurement costs associated with ABC may deter some companies from its use.

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Definitions:

Use Of Force Theory

The study and principles guiding when and how much force can be used in situations such as law enforcement or military engagements.

Angry Aggression

A form of aggression that is driven by anger and is aimed at causing harm or injury.

Slippery Slope

An argument or reasoning that suggests taking a minor action will lead to major and increasingly negative consequences, often without direct evidence.

Gratuities

Voluntary payments given for services received, often seen as a token of appreciation.