An Activity-Based Costing System Can Be a Significant Competitive Advantage

question 21

True/False

An activity-based costing system can be a significant competitive advantage for a business which does bidding for manufacturing work.

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Definitions:

Accounts Receivable Period

The standard timeframe a company needs to gather owed payments from its customers.

Sales

The transactions involving the exchange of goods or services for money, representing the major source of revenue for a business.

Merchandise

Goods to be bought and sold in the course of business, typically in a retail or wholesale setting.

Inventory Purchases

Transactions involving buying goods to be sold in the normal course of business, typically counted as a current asset.