Consider the Situation Where an Activity-Based Costing System Is in Use

question 11

Multiple Choice

Consider the situation where an activity-based costing system is in use rather than a conventional volume-based costing system.Which of the following statements is/are true?

• A) The relevant cost decision model would be inappropriate if activity-based costing is used.
• B) The relevant cost decision model is still appropriate,but a different decision criterion must be used.
• C) The data collection and analysis step is going to be affected by the use of non-volume-related cost drivers.
• D) The relevant cost decision model would be inappropriate if activity-based costing is used AND the data collection and analysis step is going to be affected by the use of non-volume-related cost drivers.

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Definitions:

Type II Error

The mistake of failing to reject a null hypothesis when it is actually false, commonly represented by the symbol β (beta).

One-Tailed Test

A hypothesis test in which the region of rejection is only on one side of the sampling distribution, used when a research hypothesis predicts a direction of the effect.

P-Value

The p-value measures the evidence against the null hypothesis, indicating the probability of observing the test results under the null hypothesis.

Two-Tailed

Pertains to a type of hypothesis test where the area of interest is in both tails of the distribution, indicating that deviations from the null hypothesis in either direction are considered.