Which of the Following Is a Sign That an ABC

question 9

Multiple Choice

Which of the following is a sign that an ABC system may be useful?

• A)There are small amounts of indirect costs.
• B)Products make diverse demands on resources because of differences in volume, process steps, batch size, or complexity.
• C)Products that a company is well-suited to make and sell show large profits; whereas products that a company is less suited to produce and sell show small profits.
• D)Operations staff agrees with accountants about the costs of manufacturing and marketing products and services.
• E)Almost none of the indirect costs are identified as output unit-level costs.

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Definitions:

Sales Trend

The analysis of sales data over a period of time to identify patterns, growth, or declines in sales performance.

Cost of Goods Sold

The direct costs attributable to the production of goods sold by a company, including material, labor, and overhead costs.

Horizontal Analysis

An analytical technique in accounting that compares financial data over multiple periods to detect trends and changes.

Trend Analysis

Involves analyzing financial statements and indicators over a certain period to identify patterns or trends in financial performance or condition.