Activity-Based Management and Costing Cannot Be Applied to Marketing in Order

question 104

Multiple Choice

Activity-based management and costing cannot be applied to marketing in order to

• A)identify the marketing activities needed to service each customer or order more appropriately.
• B)determine the variability in marketing costs across customer types and distribution.
• C)support activity-based management by encouraging the elimination of accounts with high processing costs.
• D)eliminate plantwide discretionary fixed costs.

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Definitions:

Total Manufacturing Costs

The sum of all costs directly involved in producing a product, including raw materials, labor, and manufacturing overhead.

Manufacturing Overhead

Costs incurred in the manufacturing process that are not directly tied to a specific product, including indirect materials, indirect labor, and other factory-related expenses.

Work In Process Inventory

An accounting inventory category that refers to partially completed goods still in the production process.

Finished Goods Inventory

Inventory consisting of fully finished goods that are prepared for sale but have not been purchased yet.