Before Using Activity-Based Costing (ABC),managers Must Apply the Cost-Benefit Principle

question 118

True/False

Before using activity-based costing (ABC),managers must apply the cost-benefit principle to the additional recordkeeping costs associated with ABC.

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Definitions:

Price of Labor

The wage rate or compensation given to workers for their labor services, typically influenced by the supply and demand for labor in the market.

Output Effect

The output effect describes how changes in price can affect the quantity of goods or services produced by firms, often related to the concepts of supply and demand.

Technological Improvement

Enhancements or advancements in technology that increase productivity, efficiency, or quality in the production of goods and services.

Marginal Product

The additional output that results from using one more unit of a production input, holding all other inputs constant.