Which of the Following Is True of Activity Based Costing

It is not as accurate or precise as traditional costing systems. - increasing the number of cost pools used to accumulate overhead cost.

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The answer is Activity based costing is more suited to companies with high product diversity than companies with single product line.

. D It assigns costs based on. Therefore activity-based costing considers all the potential activities instead of relying on just one variable either labor hours or machine hours. - using a variety of activity measures to assign overhead costs to products.

B ABC costing systems are less complex and therefore less costly than traditional systems. Activity-based costing attempts to overcome the perceived deficiencies in traditional costing methods by more closely aligning activities with products. Activity-based costing ABC is a costing method that identifies activities in an organization and assigns the cost of each activity to all products and services according to the actual consumption by each.

D Activity based costing is less expensive to implement than traditional costing. Cost driver rate which is calculated by total cost divided by total no. CABC leads to poorer management decisions.

1 A cost pool is an activity which consumes resources and for which overhead costs are identified and allocated. Improve production process efficiency. Many different activity bases are used in applying overhead.

A It determines the direct cost per unit of production. Reveal unnecessary costs that become targets for elimination. It is not as complex or as costly as traditional systems.

Which of the following statements is true about activity-based costing. AABC results in more cost pools being used to assign overhead costs to products. Price products appropriately with the help of accurate product cost information.

Activity-based costing ABC system assigns overheads to each activity other than cost centresIt allows the establishment of many ABC cost centres otherwise known as cost pools to which overhead. C It involves a threestage process. D ABC costing systems have separate indirect cost allocation rates for each activity.

Activity based costing also known as ABC costing refers to the allocation of cost charges and expenses to different heads or activities or divisions according to their actual use or on account of some basis for allocation ie. Of activities to arrive at a profit. B Setting up equipment is a batch level activity.

1 Introduction To Cost Management 2 Basic Cost Management Concepts 3 Cost Behavior 4 Activity-based Costing 5 Product And Service Costing. Which of the following is a true characteristic of activity-based costing. It uses separate predetermined overhead allocation rates for each activity.

This problem has been solved. Direct materials and direct labor are applied to work-in-process based upon cost drivers. Answer b is incorrect because.

A ABC systems accumulate overhead costs by departments. D Activity-based costing can be used in conjunction. Wrong - Your answer is wrong.

Current trends in manufacturing include less direct labor and more overhead. 2 The overhead absorption rate OAR is calculated in the. A Activity-based costing ignores the allocation of marketing and distribution costs.

Activity-based costing improves the accuracy of product costs by. Activity-based costing can be used in conjunction with. Bcertain overhead costs remain to be allocated by means of some arbitrary volume-based cost driver such as labor or machine hours.

Answer D is the correct option with either. Traditional costing systems use multiple predetermined overhead rates. Which of the following is true about activity-based costing.

It can be used with either process or job costing. Correct answer is d. A frequently cited limitation of activity-based costing is.

It can be used only with process costing. It should not be used with process or job costing. A Activity based costing improves control over overheads costs.

Correct - Your answer is correct. Resources are assigned to activities and activities to cost objects. In activity-based costing cost drivers are what cause costs to be incurred.

Companies implement Activity Based costing to. It can be used only with job costing. C ABC costing systems can be used in manufacturing firms only.

The following statements have been made in relation to activity-based costing. There can only be one cost driver. Either process or job costing.

It can be used with either process or job costing. Activity-based costing ABC is a method of assigning overhead and indirect costssuch as salaries and utilitiesto products and services. Activity based costing removes the.

37 Activity-based costing considers. With either process or job costing. Answer a is incorrect because.

D-is the correct answer I mean Activity -Based Costing can be used with either process or job costing. Which of the following statements is true of activity-based costing. Activity-based costing allocates overhead to multiple cost pools and assigns the cost.

Which of the following statements is true of activitybased costing. Only one activity should be used for a company. Which of the following statements is true of an activity-based costing system.

It accumulates overhead costs by processing departments. The cost driver for quality inspection is likely to be batch size. 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.

Job-order System 6 Process Costing 7 Allocating Costs Of Support Departments And Joint Products 8. The ABC system of cost accounting is based on activities. Generally activity-based costing is used in the manufacturing industry as it produces more accurate cost data generating values that are close to the true cost and can be identified during the production phase.

Relative to traidional costing methods activity based costing is more concerned with identifying processes and less concerned with casual factors of overhead costs. Acitvity based costing usues a smaller number of cost pools than does organizational based costing. - using cost pools that are more homogeneous than departmental cost pools.

B ABC costing systems are less complex and therefore less costly than traditional systems. Traditionally overhead is allocated based on direct labor cost or direct labor hours. Activity-based costing differs from traditional costing systems in that products are not cross-subsidized.

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. Identify specific products that are unprofitable. This requires abandoning the traditional division between product and period costs instead seeking to find a more direct linkage between activities costs and products.

B It is more complex than the direct labor method. See the answer See the answer done loading. C In Activity based costing each cost pool has its own predetermined overhead rate.

Activity Based Costing Google Search Marketing Strategy Template Cost Accounting Segmentation

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