ABC Generally Causes the Least Amount of Cost Distortion Among

question 158

Multiple Choice

ABC generally causes the least amount of cost distortion among products because indirect costs are allocated to the products based on

• A)types of activities used by the product.
• B)the extent to which the activities are used.
• C)both A and B.
• D)none of the above.

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Definitions:

Job Cost Sheets

Detailed records used in cost accounting to accumulate all costs associated with a specific job or project.

Work In Process

Inventory items that are in the process of being produced but are not yet complete.

Subsidiary Ledger

A detailed ledger containing individual accounts with a common characteristic, linked to a summary account in the general ledger.

Materials Ledger

A detailed record tracking the quantity and cost of materials on hand.