Which of the Following Does ABC Take into Account

question 149

Multiple Choice

Which of the following does ABC take into account?

• A)The types of manufacturing activities used by the product
• B)The extent to which the manufacturing activities are used by the product
• C)Both A and B
• D)Neither A nor B

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Definitions:

Activity Rates

Charges or costs assigned to specific activities or cost drivers in activity-based costing, used to allocate overhead.

Indirect Expenses

Costs that are not directly tied to a specific product or service, such as utilities, rent, and administrative salaries.

Operating Expenses

Costs related to the day-to-day functioning of a business, excluding cost of goods sold, such as rent, salaries, and utilities.

Department Managers

Individuals responsible for overseeing the operations, staff, and financial aspects of a particular department within an organization.