Activity-Based Costing Has More Applicability in a Process-Costing System Than

question 2

True/False

Activity-based costing has more applicability in a process-costing system than in a job-costing environment.

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Definitions:

Consumption

Refers to the use of goods and services by households.

Utils

An imaginary unit of measurement used in economics to represent the satisfaction or utility received from consuming goods and services.

Marginal Utility

An additional amount of satisfaction gained from consuming an extra unit of a good, highlighting the concept of diminishing returns.

Total Utility

The total satisfaction received from consuming a certain amount of goods or services.