An Activity-Based Costing System Improves the Allocation of Which of the Following

question 85

Multiple Choice

An activity-based costing system improves the allocation of which of the following manufacturing costs?

• A) Indirect manufacturing costs
• B) Direct labor
• C) Direct materials
• D) Sales commissions

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Definitions:

Balance Sheet

A report detailing a company's assets, liabilities, and equity owned by shareholders at a certain moment.

Income Statement

A report detailing a company's financial activities, including income, outgoings, and net earnings or deficits, over a particular period of time.

Statement of Cash Flows

A financial statement that outlines the cash inflows and outflows from operating, investing, and financing activities, helping to assess a company's liquidity.

Accounts Receivable

The money owed to a company by its customers for products or services that have been delivered but not yet paid for.