e6 - Objective 2 Terms to Learn activity-based costing(ABC...

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1. A top-selling product might actually result in losses for the company. Answer : True Difficulty : 2 Objective : 1 Terms to Learn : product undercosting 2. Companies that undercost products will most likely lose market share. Answer : False Difficulty : 2 Objective : 1 Terms to Learn : product undercosting Companies that overcost products will most likely lose market share. 3. If a company undercosts one of its products, then it will overcost at least one of its other products. Answer : True Difficulty : 2 Objective : 1 Terms to Learn : product-cost cross-subsidization 4. Direct costs plus indirect costs equal total costs. Answer : True Difficulty : 1
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Unformatted text preview: Objective : 2 Terms to Learn : activity-based costing (ABC) 5. When refining a costing system, a company should classify as many costs as possible as indirect costs. Answer : False Difficulty : 1 Objective : 2 Terms to Learn : refined costing system When refining a costing system, a company should classify as many costs as possible as direct costs. 6. In a homogeneous cost pool, all costs have a similar cause-and-effect relationship with the cost-allocation base. Answer : True Difficulty : 1 Objective : 2 Terms to Learn : activity-based costing (ABC)...
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