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Which of the following is true about activity-based costing?
ABC assumes that the resource-consuming activities that generate costs are activities and not outputs. ABC is appropriate for all types of cost accumulation systems, including both job order and process costing.
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Limitations of an activity-based costing system include which of the following?
Activity-based costs anticipate increased cost pools and increased allocation bases. The determination of the amounts that go in these pools and their related cost drivers will likely be more costly than in traditional systems.
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The basic assumption of activity-based costing is that:
ABC divides the production processes into activities where costs are accumulated. The production process assumes activities consume resources and that the outcome of the production process requires performance of the activities.
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For purposes of allocating joint costs to joint products, the sales price at point of sale, reduced by cost to complete after split-off, is assumed to be equal to the:
Sales price less the cost to complete is defined as the net sales value at split-off. In other words, this is the additional contribution to income generated by completing the product.
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Which of the following is not a basic approach to allocating costs for costing inventory in joint cost situations?
Flexible budget amounts are not a basic approach to allocating costs for costing inventory in joint cost situations.
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Which of the following parts of a manufacturing facility would be a cost center?
A cost center is where costs are grouped, assigned, or collected.
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