Activity-Based Budgeting ________

question 158

Multiple Choice

Activity-based budgeting ________.

• A) uses one cost driver such as direct labor-hours
• B) uses only output-based cost drivers such as units sold
• C) focuses on activities necessary to produce and sell products and services
• D) classifies costs by functional area within the value chain

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Definitions:

ATC

Average Total Cost; the per unit cost of production, calculated by dividing the total cost by the quantity produced.

Monopolistically Competitive

A market structure characterized by many firms selling products that are similar but not identical.

Profit-Maximizing

A strategy or approach used by businesses to determine the price and output level that generates the maximum amount of profit.

Marginal Cost

The cost of producing one additional unit of a product or service.