Select the Correct Statement Regarding Activity-Based Costing (ABC)

question 22

Multiple Choice

Select the correct statement regarding activity-based costing (ABC) .

• A) ABC does not use cost drivers.
• B) ABC uses a single activity center but multiple cost drivers.
• C) ABC uses multiple activity cost centers and multiple cost drivers.
• D) ABC uses multiple activity cost centers but a single cost driver.

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Definitions:

Marginal Revenue

The additional revenue that a firm receives from selling one more unit of a good or service.

Price Discrimination

A pricing strategy where identical or substantially similar goods or services are sold at different prices by the same provider in different markets or to different buyers.

Economic Profits

The difference between total revenues and total costs, including both explicit and implicit costs, indicating the financial gain realized when accounting for opportunity costs.

Demand Schedule

A table that lists the quantity of a good all consumers in a market will buy at every different price.