Which of the Following Statements About Activity-Based Costing (ABC)is Not

question 40

Multiple Choice

Which of the following statements about activity-based costing (ABC) is not true? (CIA adapted)

• A)In ABC,cost drivers are what cause costs to be linked to products.
• B)ABC is useful for assigning marketing and distribution costs.
• C)ABC differs from traditional costing systems in that products are not cross-subsidized.
• D)ABC is more likely to result in major differences from traditional costing systems if the firm manufactures only one product rather than multiple products.

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Definitions:

High-value

Refers to goods or services that have a substantial value in monetary terms or significant importance to a particular process or situation.

Expected Revenue

The amount of money a business anticipates receiving from its activities or sales within a specific period.

Low-value

Refers to items or services perceived as having a lower worth or importance, often associated with lower prices or quality.

Selling Price

The amount of money charged for a product or service; the price at which an item is sold to the public.