Activity-Based Costing (ABC)systems Allocate Overhead Differently Than Traditional Cost Accounting

question 37

Multiple Choice

Activity-based costing (ABC) systems allocate overhead differently than traditional cost accounting systems.The difference between an ABC and a traditional cost accounting system is that

• A) traditional systems calculate several overhead rates, one for each manufacturing activity.
• B) an ABC system uses a single allocation overhead rate.
• C) ABC systems calculate several overhead rates, one for each manufacturing activity.
• D) a traditional cost accounting system uses two overhead allocation rates: one for actual activity and one for estimates (or standards).

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Definitions:

Sensory Threshold

The minimum level of stimulus intensity required for a sense organ to detect a stimulus, marking the boundary between absence and presence of a sensation.

Working Memory

The cognitive system that holds information temporarily available for processing tasks such as problem-solving and planning.

Input Level

The degree or extent of resources, information, or material provided or required at the start of a process.