In General, the Risk of Measurement Error in an ABC

question 6

Multiple Choice

In general, the risk of measurement error in an ABC system increases when:

• A) Costs are traced rather than allocated
• B) Managers are uncertain about the relationship between costs and cost pools
• C) The number of cost pools decreases
• D) A company uses a team approach to systems design

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Definitions:

HI

The chemical formula for hydrogen iodide, a diatomic molecule.

KOH

Potassium Hydroxide, a strong alkali used in various chemical processes and as a cleaning agent.

NaBr

Sodium bromide, a salt with various uses including in medicines, as a sedative, and in photographic processing.