Activity-Based Costing (ABC)can Refine and Improve Cost Allocations Using Either

question 81

Multiple Choice

Activity-based costing (ABC) can refine and improve cost allocations using either job-order or process cost systems.There are three significant differences between ABC and traditional cost accounting approaches.An ABC system attempts to identify anything that has a cause-and-effect relationship on costs.This cause-and-effect relationship is known as a

• A)cost stimulator.
• B)overhead stimulator.
• C)cost driver.
• D)cost catalyst.

Understand how posting errors affect the financial statements and can identify specific examples of such errors.

Familiarity with the purpose and use of posting reference columns in accounting journals.

Ability to post transactions to a ledger and understand the organization of a chart of accounts.

Comprehend the relationship between debits and credits in the context of different account types.

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Definitions:

Median

A statistical measure representing the middle value in a data set, where half the numbers are above and half are below.

Absolute Zero

The lowest possible temperature where nothing could be colder and no heat energy remains in a substance, equivalent to -273.15°C or 0 Kelvin.

Nominal Data

A type of data that categorizes variables without a natural order or ranking among the categories.

Continuous Data

Data that can take any value within a given range, often representing measurements on a continuous scale.