An Activity-Based Cost Allocation System

question 38

Multiple Choice

An activity-based cost allocation system:

• A) Is one form of a direct or variable costing system.
• B) Does not provide total unit cost data.
• C) Traces costs to products on the basis of activities performed on them.
• D) Does not provide for the allocation of any cost to products that cannot be directly attributable to those products.
• E) Does not involve the level of detail and the number of allocations that companies make with traditional allocation methods.

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Definitions:

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