Answered: TRUE OR FALSE ABC's objective is to…

Business

Accounting

TRUE OR FALSE ABC's objective is to trace costs to products or services as directly as possible.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 11Q: Why is it important to know the true cost for a product or service?

See similar textbooks

Related questions

Q: Classify each of TechPro's costs below as direct or indirect.

A: Direct Costs Direct costs are the expenses that are directly involved in producing a product and…

Q: “Sunk costs are considered by a manufacturer in decision making”. Do you agree? Explain.

A: "Sunk costs are considered by a manufacturer in decision making”. I do not agree with this…

Q: TRUE OR FALSE Activities become the fundamental cost accumulation point.

A: Answer: Activities become the fundamental cost accumulation point. The statement is TRUE

Q: TRUE OR FALSE Activity-based costing method is also known as transaction-based costing.

A: Solution: True. Activity-based costing method is also known as transaction-based costing.

Q: Explain the similarities between ABC and traditional costing .

A: Traditional Costing is the method of allocation of cost based on a single cost driver; whereas under…

Q: Question 2 Direct costs: are incurred to benefit a particular accounting period. are incurred due to…

A: Direct cost are those cost which can be directly link to the manufacturing of goods or rendering of…

Q: Explain whether the following statements are valid or not valid: A. Target costing ignores non-value…

A: Target costing is an costing technique in which it was the difference between targeted sales minus…

Q: Terms used in manufacturing cost systems are: manufacturing costs prime costs conversion costs both…

A: Manufacturing cost refers to the total cost incurred by the entity to manufacture a product. It…

Q: Explain what activity-based costing is, and a brief explanation regarding how ABC improves the…

A: In costing their are different types of overheads and also different types of methods to allocate…

Q: 1. Explain the role of activity drivers in assigning costs to products.

A: Hi student Since there are multiple questions, we will answer only first question.

Q: What is the danger in allocating common fixed costs among products or other segments of an…

A: The costs which are not allocated to any specific segment in the business organization are called…

Q: Programmed costs are also known as O sunk costs O differential costs O standard costs Omanaged costs

A: Cost accounting is the branch of accounting that inspects the cost structure of a business. This…

Q: When refining a costing system, the desire to identify direct costs, is primarily drive by the fact…

A: While refining a costing system the main purpose for direct costs is to identify and classify as…

Q: State and explain whether the following statements are valid or not valid: A. Target costing…

A: Target costing is a costing management method where it is the difference between targeted sales…

Q: Product costs are also callec Direct costs. Overhead costs

A: Given: 1. Product costs are also called: *Direct costs.Overhead costs.Manufacturing overhead…

Q: . Assume that the company uses absorption costing:

A: In Absorption Costing along with variable costs we also consder fixed costs as cost…

Q: Manufacturing costs include selling and administrative costs. Select one: O a. TRUE O b. FALSE

A: Manufacturing cost: It is a cost incurred for the production of a product like Direct labor, direct…

Q: tandard cost systems provide companies with a number of advantages, argue the statement.

Q: Costs that must be allocated in order to be assigned to a product or department are called direct…

A: Disclaimer: “Since you have asked multiple questions, we will solve the first question for you. If…

Q: Which one of the following is another name for product costs? Select one: a. Direct costs b. Period…

A: Product cost means the cost of producing one unit of finished goods.

Q: Why is it important to know the true cost for a product or service?

A: True Cost and its importance The meaning of true cost is simple term is the the distinguish between…

Q: 1. Planning is a function that involves ? 2. Product costs are costs that are a neccessary and…

A: Hi! There are two questions given, but we are entitled to solve only one question at a time so I…

Q: Standard costs are preset costs for delivering a product or service under normal conditlons. True or…

A: Lets understand the basics. Management prepares the standard cost sheet which contain details about…

Q: True or False. Direct costs can be specifically traced to a cost object.

A: Direct costs, as the name suggests are the costs that can be directly attributed to a cost object.…

Q: TRUE OR FALSE The general principle in determining the number of cost pools is that a separate cost…

A: Solution: The general principle in determining the number of cost pools is that a separate cost pool…

Q: Which of the following statements is true? * A. The traditional approach to costing uses many…

A: Cost accounting is one of the branches of accounting. Under this, all costs related to the product…

Q: tatement is true or false, and correct the false tatement(s): Manufacturing cost is called period…

A: Manufacturing cost is the cost incurred to manufacture units . It includes direct material , direct…

Q: The following statements are correct excerpt? A. Different costs are used for different purposes B.…

A: Cost accounting means where every cost of doing business is recorded in necessary account and cost…

Q: A direct cost is a cost that is classified by Traceability Behaviour Controllability…

A: Following is the answer to the given question

Q: The cost that is used for the benefit of many cost objects and cannot be easily related to any…

A: Answer is as follows

Q: 1. What are the three primary reasons of using a standard cost system? In a business that routinely…

A: Hi student Since there are multiple questions, we will answer only first question.

Q: Which is the reason a company would implement activity based costing

A: Activity based costing is the modern technique of allocation of overheads. In this, overheads are…

Q: In activity-based costing, some manufacturing costs may be excluded from product costs TRUE FALSE

A: Lets understand the basics. Activity based costing is as the name suggest allocate cost based on the…

Q: Y,a,b and X explain these with help of examples according to cost behaviour

A: Cost behavior analysis helps to understand the change in the total cost with respect to the change…

Q: true (T) or false (F) Service companies are not able to use process costing.

Q: A 'product' cost is a cost that is classified by: a. behavior b. function c.…

A: The cost incurred on production directly or indirectly related to production is said to be product…

Q: Define standard costs and explain how standard cost information is useful formanagement by…

A: Standard costs: These are the costs which a company determines as a standard to attain its…

Q: Define the following concepts: a) Absorption costing- b) Cost behavour-

A: Absorption (full) costing is a costing technique in which all the manufacturing costs including…

Q: What is the danger in allocating common fixed costs among product lines or other segmentsof an…

A: Fixed cost: It can be defined as the cost that does not vary with an increase or decrease in the…

Q: Which of the following is a correct statement? Check only those that are correct. Choose All That…

A: Cost tracing refers to the process of matching a cost with the product which is being produced.…

Q: ABC generally causes the least amount of cost distortion among products because indirect costs are…

A: Activity-based costing (ABC): Activity-based costing refers to the method of costing where the…

Q: Classify the following fixed costs as normally being either committed or discretionary:b.…

A: Given: To analyse if advertising follows either committed or discretionary fixed costs.

Q: Costs that can be conveniently and economically traced to specific products are called: Direct costs…

A: Direct cost means the cost which is related with production of goods including factory overhead…

Q: A cost object indicates how costs are related or identified. O FALSE O TRUE

A: Given, A Cost object is a term in cost accounting which is used to assign the cost.

Question

TRUE OR FALSE

ABC's objective is to trace costs to products or services as directly as possible.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

Which statement is correct? A. Activity-based cost systems are less costly than traditional cost systems. B. Activity-based cost systems are easier to implement than traditional cost systems. C. Activity-based cost systems are more accurate than traditional cost systems. D. Activity-based cost systems provide the same data as traditional cost systems.
Why is it important to know the true cost for a product or service?
What advantage does the FIFO cost method have over the average cost method relative to providing information for cost control?
What is the scattergraph method, and why is it used? Why is a scattergraph a good first step in separating mixed costs into their fixed and variable components?
Which of the following statements is true of ABC systems? A) ABC systems are time-driven cost systems. B) ABC systems classify some direct costs as indirect costs and some indirect costs as direct costs. C) ABC systems provide valuable information to managers beyond accurate product costs. D) ABC systems assume all costs are variable costs.
By showing relevant workings, compute the total product cost usingtraditional and ABC systems for Hups model.
1-Why is it important to distinguish cost incurrence from locked-in cost? 2- How do companies determine target costs?
What are some common challenges that companies face when implementing standard cost systems, and how can these challenges be addressed?
ABC generally causes the least amount of cost distortion among products because indirect costs are allocated to the products based on
Companies benefit greatly from the use of a standard cost system, and the statement?
On assigning costs to different products. What is the benefit of cost assignment? How does this aid the organization in financial decisions?
Which costs assignment method would you use to assign prime costs to a product: a.direct tracing b.driver tracing c.allocation d.none of these