Which of the Following Are True Regarding Activity-Based Costing

question 84

Multiple Choice

Which of the following are true regarding activity-based costing?

• A) A primary goal of using ABC is the accurate allocation of manufacturing overhead to product lines.
• B) Under ABC, direct labor hours is never used to allocate overhead costs to activity pools or product lines.
• C) The use of ABC is indicated when it is suspected that each of the firm's product lines consume approximately the same amount of overhead resources but the current allocation scheme assigns each line a substantially different amount.
• D) ABC can be used in conjunction with process costing.

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Definitions:

Equilibrium

A condition or state where all acting influences are balanced, particularly in a market when supply equals demand.

Penalty Kick

A penalty kick in economics might refer metaphorically to an opportunity to score or gain significantly with little opposition, though it's primarily a sports term.

Probability of Success

A quantitative measure expressing the likelihood of achieving a specified outcome or reaching a goal.

Probability of Failure

The likelihood that a system or component will fail to perform its intended function within a specified period.