Which of the following is false about activity-based costing? Implementing an activity-based costing system is more costly than implementing a traditional cost allocation system. In ABC, the assumption is that activities use resources or cause costs. An activity-based costing system relies only on volume measures such as direct labor hours to allocate all overhead costs to products. A traditional cost allocation system and an activity-based costing system are used to estimate the profitability of products.

Activity-Based Costing (ABC): Under activity-based costing the different cost is assigned to a…

Answered: Which of the following is false about…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 12MC: Which statement is correct? A. Activity-based cost systems are less costly than traditional cost...

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Which of the following is false about activity-based costing?

Implementing an activity-based costing system is more costly than implementing a traditional cost allocation system.
In ABC, the assumption is that activities use resources or cause costs.
An activity-based costing system relies only on volume measures such as direct labor hours to allocate all overhead costs to products.
A traditional cost allocation system and an activity-based costing system are used to estimate the profitability of products.

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