Which of the Following Is True Concerning Selecting a Cost-Allocation

question 65

Multiple Choice

Which of the following is true concerning selecting a cost-allocation base in an ABC system?

• A) Cost-allocation bases are not relevant in defining the number of activity pools.
• B) All costs can be directly identified with a specific activity.
• C) The allocation base chosen may be constrained by the availability of reliable data.
• D) Costs may need to be allocated to services first, before the costs of services can be allocated to activities.
• E) Output unit-level costs cannot be related to a cost-allocation base.

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Definitions:

Divestiture

The process of selling off a business division, investment, or asset by a company, often as a strategy to focus on core operations, cut losses, or raise capital.

Acquisition

The process of one company purchasing most or all of another company's shares to gain control of that company.

Merger

The combination of two or more companies into a single entity, often to enhance competitiveness or expand market reach.

Global Expansion

The process by which a company extends its operations and presence into new international markets.