An Activity-Based Costing System Can Be a Significant Competitive Advantage

question 21

True/False

An activity-based costing system can be a significant competitive advantage for a business which does bidding for manufacturing work.

---

Definitions:

Asset Approach

A valuation method that estimates a company's value based on the total value of its assets minus its liabilities.

Liability Approach

A method in accounting that emphasizes recording all financial liabilities at their current value to ensure accurate financial reporting.

Deferred Income Tax Asset

A financial statement item that refers to taxes that have been accrued but not yet paid, which is considered a company asset because it indicates future tax payments that are lower than the current tax expense.

Income Before Taxes

A financial measure indicating the profitability of a company before accounting for income taxes.