Which of the Following Is an Advantage of Using Activity-Based

question 39

Multiple Choice

Which of the following is an advantage of using activity-based costing (ABC) ?

• A)It provides management with simpler,less accurate information than traditional costing methods.
• B)Fixed costs are presented on a per unit basis.
• C)It tends to provide more accurate product cost information.
• D)It is typically inexpensive to implement.
• E)None of the answer choices is correct.

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Definitions:

Journal Entry

A record of financial transactions in the accounting books of a business, indicating the accounts affected and the amounts.

Credits

Refers to the accounting entries that increase liabilities or decrease assets, representing the opposite effect of debits in double-entry bookkeeping.

Liability Accounts

Accounts on a balance sheet that represent obligations or debts that a company owes to others, which must be settled over time through the transfer of economic benefits including money, goods, or services.

Stockholders' Equity Accounts

These accounts represent the owners' residual interest in the corporation's assets after deducting liabilities.