The Statement Concerning Activity-Based Costing ABC)that Is Not True Is

question 12

Multiple Choice

The statement concerning Activity-based costing ABC) that is not true is:

• A)It has been introduced to overcome distortions in costing multiple products which occur when a single base is used to apply overhead to products
• B)ABC is cheaper and less time consuming to implement than traditional costing systems
• C)Overhead costs are accumulated by activities and then assigned to cost objects using a different cost driver for each activity.
• D)ABC can be applied in service businesses as well as in manufacturing businesses

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Definitions:

Item Analysis

A series of statistical tests and procedures that can be used to assess for homogeneity in a test.

Construct Validity

The degree to which a test accurately measures the theoretical construct or concept it is intended to measure.

Content Validity

The ability of an instrument to fully assess or measure a construct of interest by sufficiently sampling from the entire universe of items for which the instrument was designed to sample.

Well-Established Construct

A concept or theory that has been extensively researched and validated, demonstrating consistent and reliable findings across studies.