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Accountant A says that Activity-based costing can be used to determine the profitability of each customer. Accountant B says that to determine Allocated costs you

Accountant A says that Activity-based costing can be used to determine the profitability of each customer. Accountant B says that to determine Allocated costs you need to divide the activity usage by the activity rate.

Who is right?

Multiple Choice

  • Accountant A is right.
  • Accountant B is right.
  • Both accountants are right.
  • Neither accountant is right.

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