Activity-Based Costing Is Most Likely to Yield Benefits for Companies

question 52

Multiple Choice

Activity-based costing is most likely to yield benefits for companies with all of the following characteristics EXCEPT:

• A)a highly competitive environment,where cost control is critical.
• B)numerous products that consume different amounts of resources.
• C)operations that remain fairly consistent.
• D)accessible accounting and information systems expertise to maintain the system.

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Definitions:

Rate of Return

The percentage gain or loss on an investment over a specified time period.

Operating Cash Flow

Cash generated from a company's regular operational activities, reflecting its ability to generate cash from its core business operations.

Top-Down Approach

A method of analysis that starts with the broader economy or large investment categories and works its way down to individual stocks or securities.

Sales

The total amount of goods or services sold by a company within a specified period.