Which of the Following Statements Concerning Activity-Based Costing [ABC] Is

question 30

Multiple Choice

Which of the following statements concerning Activity-Based Costing [ABC] is incorrect?

• A) production processes are broken down into activities.
• B) cost drivers are used to assign costs between activities.
• C) it is now used by firms much more commonly than traditional costing.
• D) the use of cost drivers allows management to apply overhead more accurately to products with different production requirements.

---

Definitions:

No Further Deposits

A restriction placed on a bank account or investment that prevents additional funds from being added.

Compounded Annually

A method of calculating interest where the amount earned is added to the principal at the end of each year, so that the interest for the next year is calculated on the increased principal.

Interest

The charge for borrowing money or the return on investment for funds on deposit, expressed as a percentage of the principal.

Withdrawals

The act of taking out funds from an account, trust, or deposit.