12 Questions
Activity-Based Costing accurately allocates labor costs to products and processes.
False
Activity-Based Costing is suitable for companies with high overhead costs.
True
Data produced by Activity-Based Costing always conforms to generally accepted accounting principles.
False
Activity-Based Costing is useful for identifying inefficient processes and targets for improvement.
True
Activity-Based Costing is a cost-effective method for accumulating and analyzing information.
False
Activity-Based Costing is suitable for companies with simple product lines and low overhead costs.
False
Activity-Based Costing provides a realistic understanding of ______ costs for specific products.
manufacturing
ABC identifies ______ processes and targets for improvement.
inefficient
Collection and preparation of ______ is time-consuming in Activity-Based Costing.
data
Activity-Based Costing determines ______ profit margins more precisely.
product
ABC discovers which processes have ______ and wasted costs.
unnecessary
Overhead costs constitute a significant ______ of total costs, indicating a need for ABC.
portion
Test your understanding of Activity-Based Costing, a method that assigns costs to products based on the activities they require. This quiz covers the advantages and disadvantages of ABC, including its impact on cost allocation, process improvement, and product profitability.
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