An Activity-Based Costing System That Is Designed for Internal Decision-Making

question 105

Multiple Choice

An activity-based costing system that is designed for internal decision-making will not conform to generally accepted accounting principles because:

• A)some manufacturing costs (i.e., the costs of idle capacity and organization-sustaining costs) will not be assigned to products.
• B)some nonmanufacturing costs are assigned to products.
• C)first-stage allocations may be based on subjective interview data.
• D)all of these are reasons why an activity-based costing system that is designed for internal decision-making will not conform to generally accepted accounting principles.

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The process of creating benefits or value for stakeholders through the provision of products, services, or information.

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