(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:

Psychological

Pertaining to the scientific study of the mind and behavior, including cognitive, emotional, and social processes.

Vague Sense

A feeling or perception that is not clear, definite, or strongly formed.

Age of Six Months

A period marking six months of age, a developmental milestone in infants characterized by growth and the beginning of solid food introduction.

Boy or Girl

An inquiry or classification typically made at birth based on biological characteristics, often discussed in contexts addressing gender norms and identities.