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olga_2 [115]
3 years ago
11

It ONLY makes sense to implement an ABC system when: A. ABC provides information to make better decisions. B. Its benefits excee

d implementation costs. C. ABC traces more costs as direct costs. D. There is a strong cause-and-effect relationship between costs in the cost pools and their cost-allocation bases.
Business
1 answer:
mel-nik [20]3 years ago
8 0

Answer:

B. Its benefits exceed implementation costs.

Explanation:

As all accounting and managerial method and procedures is subject to the cost/benefit rule before application.

<em>The cost to achieve information must be lower than the benefit this information brings.</em>

The company will first check for this, it will look for the cost to find the activities and to identify the cost driver and evaluate the potential benefit of this new way to determinate the overhead per product.

Only if this benefit exceeds the cost the comapny will implement ABC cost

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6 0
3 years ago
Allowance for Doubtful Accounts has a debit balance of $2,300 at the end of the year (before adjustment). The company prepares a
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d. Debit Bad Debt Expense, $34,200; credit Allowance for Doubtful Accounts, $34,200

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allowance balance                           2,300 debit

estimated uncollectible accounts   31,900 credit

adjustment needed                         34,200 credit

We need to adjust the allowance to our estimated uncollectible account. Currently, it has 2,300 debit balance. We need to increase it to 31,900

If we think it in two steps:

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<u>The adjusting entry will be:</u>

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allowance for doubtful accounts                        34,200 credit

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