All of the Following Describe an ABC System Except

question 105

Multiple Choice

All of the following describe an ABC system except

• A)ABC systems may only be used by service companies.
• B)ABC systems can create more accurate product costs.
• C)ABC systems are more complex and costly than traditional costing systems.
• D)ABC systems are used in both manufacturing and nonmanufacturing companies.

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Definitions:

Lump Sum Payment

A single payment made for the total amount owed, rather than breaking the payment into installments, often used in settling debts or purchasing goods.

Simple Interest

A method of calculating the interest charge on a loan or financial product based on the original principal amount and the interest rate over a period of time.

Principal Amount

This is the original sum of money borrowed in a loan or put into an investment, not including any interest or dividends.

Invested

Describes the act of allocating resources, usually money, into something to earn income or gain profits.