Indicate whether the following statements are true or false. (a) The reasoning behind ABC cost allocation is

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Indicate whether the following statements are true or false.

  (a) The reasoning behind ABC cost allocation is that products consume activities and activities consume resources.
  (b) Activity-based costing is an approach for allocating direct labor to products.
  (c) In today’s increasingly automated environment, direct labor is never an appropriate basis for allocating costs to products.
  (d) A cost driver is any factor or activity that has a direct cause-effect relationship with resources consumed.
  (e) Activity-based costing segregates overhead into various cost pools in an effort to provide more accurate cost information.

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Managerial Accounting Tools for business decision making

ISBN: 978-1118096895

6th Edition

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

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