A Difference in GAAP-Based Product Costing and Activity-Based Costing Is

question 24

Multiple Choice

A difference in GAAP-based product costing and activity-based costing is that under activity-based costing

• A)all costs are classified as product and period costs whereas under GAAP they are classified by behavior.
• B)sales less cost of goods sold is classified as gross profit whereas under GAAP this subtotal is titled contribution margin.
• C)selling and administrative costs are allocated to products if they are incurred to provide resources that are consumed by unit-level,batch-level or product-level activities.
• D)all costs are traceable whereas in GAAP-based costing all costs are not traceable.

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Definitions:

Frederick Taylor

was an American mechanical engineer who sought to improve industrial efficiency and is known as the father of scientific management.

Administrative Principles

Guidelines or rules that form the basis of administrative practices designed to efficiently organize and manage organizations.

Hawthorne Studies

A series of experiments on workplace productivity that highlighted the impact of social relations and worker satisfaction.

Worker Performance

The degree to which an employee accomplishes tasks and fulfills objectives efficiently and effectively, often evaluated against predetermined standards.