(Appendix 7A)Why Would an Activity-Based Costing System That Is Designed

question 21

Multiple Choice

(Appendix 7A) Why would an activity-based costing system that is designed for internal decision making NOT conform to generally accepted accounting principles?

• A) Some manufacturing costs (i.e., the costs of idle capacity and organization-sustaining costs) will not be assigned to products.
• B) Some non-manufacturing costs are assigned to products.
• C) First-stage allocations may be based on subjective interview data.
• D) All of the above.

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Definitions:

Adapt

To adjust or change one's behavior or thinking to suit a new situation or environment.

Conditioned Stimulus

A neutral stimulus that, through repeated pairings with an unconditioned stimulus, comes to evoke a conditioned response.

Unconditioned Stimulus

A stimulus (e.g., meat powder) that naturally evokes a particular response (salivation).

Unconscious Evaluations

Judgments or assessments made without conscious awareness, often based on automatic cognitive processes.