Which of the Following Statements About Activity-Based Costing Is NOT

question 226

Multiple Choice

Which of the following statements about activity-based costing is NOT true?

• A)Activity-based costing is useful for allocating marketing and distribution costs.
• B)Activity-based costing differs from traditional costing systems in that products are not cross-subsidised.
• C)Activity-based costing is more likely to result in major differences from traditional costing systems if the firm manufactures only one product rather than multiple products.
• D)Activity-based costing seeks to distinguish batch-level,product-sustaining and facility-sustaining costs,especially when they are not proportionate to one another.

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Definitions:

Demand Function

A mathematical equation representing the relationship between the quantity demanded of a good and factors affecting its demand, such as price.

Inverse Demand

A representation of demand that expresses price as a function of quantity demanded, contrary to the typical demand function.

Inverse Supply

A concept in economics that describes a situation in which the supply of a good decreases as its price decreases, opposite to the normal supply behavior.

Tax

Mandatory financial charge or some other type of levy imposed upon a taxpayer by a governmental organization in order to fund government spending and various public expenditures.