Compared to a Traditional Two-Stage Cost Allocation System,activity-Based Costing Systems

question 52

Multiple Choice

Compared to a traditional two-stage cost allocation system,activity-based costing systems:

• A) Use fewer cost centers.
• B) Use more cost drivers.
• C) Are less expensive to maintain.
• D) All of these answers are correct.

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Definitions:

Downstream Activity

Refers to the later stages in the supply chain, typically involving the distribution, sale, and customer service aspects of a business.

FedEx

A multinational delivery services company known for its overnight shipping service and pioneering a system that could track packages and provide real-time updates on package location.

UPS

Uninterruptible Power Supply, a device that provides emergency power to a load when the input power source fails.

Material Flows

The movement of raw materials, components, and finished products through production processes to delivery to the end user.