Which of the Following Statements Regarding Service Companies and Activity-Based

question 67

Multiple Choice

Which of the following statements regarding service companies and activity-based costing (ABC) is true?

• A) Service companies are not permitted to use ABC costing.
• B) Service companies find it easier to use ABC costing than manufacturing companies.
• C) Fewer repetitive activities make ABC costing more difficult to implement in service companies.
• D) Service companies have proportionately less facility-level costs than manufacturing companies.

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Definitions:

Medical Clinic

A healthcare facility that provides outpatient services, offering medical treatment and advice to patients.

Operation Of Law

Processes or rights that are automatically applied by virtue of legal authority, without the need for action by any party.

Tender Of Performance

An offer by one party to perform their obligations under a contract, in accordance with the terms agreed upon, which can be relevant in resolving disputes about contract breaches.

Agreement

A mutual understanding or arrangement, often formal, between two or more parties regarding their rights and duties toward each other.