Companies That Use Activity-Based Costing Do NOT Need to Trace

question 43

True/False

Companies that use activity-based costing do NOT need to trace direct materials and direct labour to products as is done in traditional costing systems.

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Definitions:

Directors

Individuals appointed or elected to oversee the management of a company and make key decisions.

Instrument

A formal legal document that represents a right or interest, such as a check, promissory note, or bond.

Credit

The ability to obtain goods or services before payment, based on the trust that payment will be made in the future.

Uniform Commercial Code

The Uniform Commercial Code (UCC) is a comprehensive set of laws governing all commercial transactions in the United States, intended to harmonize the law of sales and other commercial transactions.