Regarding Activity-Based Costing Systems, Which of the Following Statements Is

question 95

Multiple Choice

Regarding activity-based costing systems, which of the following statements is true?

• A)ABC systems accumulate overhead costs by departments.
• B)ABC costing systems are less complex and, therefore, less costly than traditional systems.
• C)ABC costing systems have separate indirect cost allocation rates for each activity.
• D)ABC costing systems can be used in manufacturing firms only.

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Definitions:

Argument by Analogy

A form of reasoning in which an argument is made by comparing two similar cases and inferring that what is true for one case is also true for the other.

Alike in Respects

Similar or comparable in certain ways or aspects.

Causal Relationships

Connections between two events where one event is understood to be a direct result of the other.

Generalization

A broad statement or an idea that applies to a group based on experiences with or observations of a smaller segment of the group.