Which of the Following Statements Concerning Activity-Based Costing (ABC)is Not

question 34

Multiple Choice

Which of the following statements concerning activity-based costing (ABC) is not true?

• 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.

---

Definitions:

Natural Groups

Groups that exist in the real world as they are, without manipulation or creation for research purposes, such as ethnic or gender groups.

Two Groups

A research design involving comparison between two separate groups of participants to determine the effect of a variable.

Experiment

A scientific procedure undertaken to make a discovery, test a hypothesis, or demonstrate a known fact.

History Effect

refers to the impact that events occurring between the first and second measurements in an experiment have on the subjects' performance, independent of the experimental manipulation.