Question 73 pts

Which of the following statements is true of ABC systems?

Group of answer choices

ABC systems provide less insight than traditional systems into the management of the indirect costs.

ABC systems are used by managers for strategic decisions rather than for inventory valuation in merchandising companies.

Service companies find great value from ABC systems because a vast majority of their cost structure is composed of direct costs.

ABC systems are valuable for pricing decisions, but not for understanding, managing, and reducing costs in government institutions.

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Flag question: Question 8

Question 83 pts

The approach often used when dealing with small amounts of underallocated or overallocated overhead is the:

Group of answer choices

adjusted allocation-rate approach.

proration approach.

write-off to cost of goods sold approach.

adjusted write-off approach.

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Flag question: Question 9

Question 93 pts

Which of the following statements about normal costing is true?

Group of answer choices

Direct costs and indirect costs are traced using an actual rate.

Direct costs and indirect costs are traced using budgeted rates.

Direct costs are traced using a budgeted rate, and indirect costs are allocated using an actual rate.

Direct costs are traced using an actual rate, and indirect costs are allocated using a budgeted rate.

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Flag question: Question 10

Question 103 pts

The major objectives of a budgeting process should include all the following EXCEPT:

Group of answer choices

providing coordination among the subunits.

providing communication among the subunits.

providing unyielding commitment to targets to achieve a target profit.

providing a framework for judging performance and facilitating learning.