The Benefits Arising from the Introduction of Activity-Based Costing Are

question 41

Multiple Choice

The benefits arising from the introduction of activity-based costing are likely to be greater where:
i. overhead is a large proportion of total cost.
ii. implementation costs are not high due to the support of advanced IT systems.
iii. batches are of a similar size.

• A) i and ii
• B) i and iii
• C) ii and iii
• D) None of the given answers

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Definitions:

Par Value

The nominal or face value of a bond, stock, or coupon as stated by the issuer.

Preferred Stock

A class of ownership in a corporation with a specified dividend that must be paid out before dividends to common stockholders.

Common Stock

A type of equity ownership in a corporation, representing a claim on a portion of the profits and assets.

Subscriptions Receivable-Common Stock

An account representing amounts due from subscribers who have agreed to buy shares of common stock, not yet paid for.