Which of the Following Statements Is True of Activity-based Costing

The reason for this is that the activity based costing provides a more precise or accurate indirect cost breakdown. It seldom produces changes in the companys customer mix.

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Cost drivers are supposed to be selected that cause costs to be incurred.

. MSQ-12 ACTIVITY-BASED COSTING Page 1 of 10 THEORY 1. The following statements have been made in relation to activity-based costing. The following statements have been made in relation to activity-based costing.

Which of the following statements about activity-based costing is not true. A cost driver is any factor that causes a change in the cost of an activity. ABC is more likely to result in big differences from a traditional costing system if the business makes only one product rather than multiple products.

Activity based costing provides more accurate information than traditional costing. Which of the following statements is true of activity-based costing. Activity-based costing differs from traditional costing systems in that products are not cross-subsidized.

Which of the following is a true statement about activity-based customer costing. 2 Which if the following statements about Activity Based Costing isare true. ABC is useful for allocating marketing and distribution costs.

A Statement 1 only B Statement 2 only C Statements 1 and 2 D Neither statement. A Traditional costing uses only production volume based drivers while activity based costing uses only non production volume based drivers. With either process or job costing.

Activity-based costing is more likely to result in major differences from traditional costing systems if the firm manufactures only one product rather than multiple products. The cost driver for quality inspection is likely to be batch size. 1 A cost pool is an activity which consumes resources and for which overhead costs are identified and allocated.

An activity cost pool collects costs related to the same activity. Activities are the cost objects of the second stage of ABC. B Activity based costing is more suited to companies with high product diversity than companies with single product line.

ABC ignores the allocation of storage costs. Answer added by Saidul Alam Accountant Akhtar Al Balushi Trad. The challenge in designing an activity-based costing system is to identify all of the activities that explain the variation in overhead costs.

C Activity based costing broadly averages or spreads the cost of resources uniformly to cost objects such as products or. The traditional approach to costing uses many different cost drivers. B Activity based costing is more suited to companies with high product diversity than companies with single product line.

B Traditional costing treats only unit level costs as variable while ABC systems treat unit. 2 The overhead absorption rate OAR is calculated in the. C Activity based costing broadly averages or spreads the cost of resources uniformly to cost objects such as products or.

Statements II and III are true. ABC is more likely to result in big differences from a traditional costing system if the business makes only one product rather than multiple products. 1 A cost pool is an activity which consumes resources and for which overhead costs are identified and allocated.

Which of the following statements is true of activity-based costing. Activity-based costing is useful for allocating marketing and distribution costs. Answer a is incorrect because.

In activity-based costing cost drivers are what cause costs to be incurred. Many different activity bases are used in applying overhead. Correct answer is d.

2 The overhead absorption rate OAR is calculated in the. C Activity-based costing classifies some of the indirect costs as direct costs. B Activity-based costing is more likely to result in major differences from traditional costing systems if the firm manufactures only one product rather than multiple products.

Activity-based costing is likely to result in major differences when the firm manufactures multiple products. Activity-based costing is more likely to result in major differences from traditional costing systems if the firm manufactures only one product rather than multiple products. There can only be one cost driver.

D-is the correct answer I mean Activity -Based Costing can be used with either process or job costing. Activity-based costing can be used in. Traditional absorption costing tends to under-allocate overhead costs to low-volume products 2.

ABC ignores the allocation of storage costs. D Chances of product-cost cross-subsidization are higher in activity-based costing compared to traditional costing systems. Costs that are indirect to products are by definition traceable directly to products.

Activity-based costing seeks to distinguish batch-level product-sustaining and facility-sustaining costs especially when they are not proportionate to one another Activity-based costing is more. Which of the following statements is true. It can be used with either process or job costing.

Statements I and III are true. Which of the following statements about activity-based costing is NOT true. Costs that are indirect to products are traceable to some activity.

Activity-based costing is designed to allocate the costs of production. All of the statements are true. It also takes other important factors into account before allocating a cost to a given product.

D Activity-based costing can be used in conjunction. Customer diversity requires multiple drivers to trace costs accurately to customers. User qa_get_logged_in_handle sort which of the following statements is true with regard to activity-based costing rates.

A In activity-based costing direct labor-hours is always the best allocation base to allocate all non-manufacturing indirect costs. Which of the following statements is true with. Customers consume customer-driven activities in the same proportions.

A In activity-based costing direct labor-hours is always the best allocation base to allocate all non-manufacturing indirect costs. It never improves profitability. Activity-based costing differs from traditional costing systems in that products are not cross-subsidized.

Activity-based costing is useful for allocating marketing and distribution costs. Statements I II and III are true. ABC is more likely to result in major differences from traditional costing systems if the firm manufactures.

Only one activity should be used for a company. Wrong - Your answer is wrong. Correct - Your answer is correct.

Direct materials and direct labor are applied to work-in-process based upon cost drivers.

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