The UNIQUE Feature of an ABC System Is the Emphasis

question 195

Multiple Choice

The UNIQUE feature of an ABC system is the emphasis on:

• A)individual activities.
• B)department indirect-cost rates.
• C)multiple-cost pools.
• D)costing individual jobs.

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Definitions:

Optimal Order Size

The quantity that minimizes the total cost of inventory, including holding and ordering costs.

Annual Inventory Cost

The total cost associated with storing and maintaining a company's inventory over one year, including warehousing and insurance.

Maximum Inventory Level

The highest amount of inventory a business can hold to efficiently meet customer demand while minimizing holding costs.

Setup Cost

The expenses incurred to prepare and equip a process, production line, or machine to manufacture a new product batch or order.