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Question 372 - CSCP discussion

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Activity costing (ABC) is an example of:

A.
Generally accepted accounting principles.
Answers
A.
Generally accepted accounting principles.
B.
Inventory classification system.
Answers
B.
Inventory classification system.
C.
Asset cost estimate technique.
Answers
C.
Asset cost estimate technique.
D.
Cost allocation technique.
Answers
D.
Cost allocation technique.
Suggested answer: D

Explanation:

Activity-Based Costing (ABC) is a cost allocation technique that assigns costs to products and services based on the resources they consume. ABC provides more accurate cost information by identifying and evaluating activities that drive costs, helping organizations allocate overhead more precisely. This technique helps in better understanding the true cost of production and supports strategic decision-making. It is not part of Generally Accepted Accounting Principles (A), an inventory classification system (B), or an asset cost estimate technique (C).

Kaplan, R. S., & Anderson, S. R. (2007). Time-Driven Activity-Based Costing: A Simpler and More Powerful Path to Higher Profits. Harvard Business Review Press.

Cooper, R., & Kaplan, R. S. (1991). Profit Priorities from Activity-Based Costing. Harvard Business Review.

asked 16/09/2024
Fiston LOMATE
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