alleryStart learning →ABC can help a firm to do which of these with unprofitable products?
AHide them in overheads
BCharge them to goodwill
CIdentify and eliminate them
DIncrease their volume
Answer & Solution
Correct answer: C. Identify and eliminate them
Accurate activity costing reveals loss-making products so the firm can drop them or reprice overpriced ones.
Keep practising Activity Based Costing
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Related questions
Setup pool Rs 60,000, 150 setups. Product A used 90 setups. A's share?ABC assigns Rs 36,000 overhead to 1,200 units. Overhead per unit?Service pool Rs 1,80,000 for 6,000 calls. A client making 40 calls bears?Overhead Rs 1,00,000 split by units: A 1,000, B 4,000. A's volume-based share?Setup pool Rs 1,00,000 for 100 setups. Product A: 1,000 units, 50 setups. Setup cost per uOverhead is Rs 8,000 conventionally and Rs 12,000 under ABC. The product isOverhead Rs 2,00,000 over 10,000 labour hours. Product using 400 hours gets?Setup Rs 60,000 (200 setups), machine Rs 40,000 (2,000 hrs). Batch of 50 units: 10 setups,