Which of the Following Statements Is False Regarding the Identification

question 78

Multiple Choice

Which of the following statements is false regarding the identification of activities in activity-based costing (ABC) ?

• A) The identification of activities that drive overhead costs is done before cost drivers are selected.
• B) An activity can be thought of as a procedure or process that causes work to be accomplished.
• C) Overhead costs should not be traced to more than one activity.
• D) Because of different types of production processes and products, every business will have a different set of activities and cost drivers.

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Definitions:

Master Production Schedule

A detailed plan that outlines what a manufacturing facility will produce, in what quantities, and when, to meet anticipated demand.

Bill of Material

A comprehensive list of raw materials, components, and instructions required to construct, manufacture, or repair a product or service.

Inventory Records

Documentation that tracks the quantity, value, and location of products or materials held by a company.

ABC Analysis

An inventory categorization technique that divides items into three categories, A, B, and C, based on their value to the company, to optimize inventory management.