Question

Activity based costing can be used by the buyer to:a. correct the distortions built into product costing by the way that direct costs are allocated. b. correct the distortions built into product costing by the way that the learning curve is applied to direct labor costs. c. eliminate nonvalue-adding activities, increase activity occurrences, and increase the rate of return. d. eliminate nonvalue-adding activities; reduce activity occurrences, and reduce the cost driver rate. is important to cost accountants, but has little practical use for buyers.

Answer 1

Answer: The correct answer is "is important to cost accountants, but has little practical use for buyers.".

Explanation: Activity based costing is important to cost accountants, but has little practical use for buyers because this costing method is used by cost accountants to eliminate nonvalue-adding activities; reduce activity occurrences, and reduce the cost driver rate.