Which of the following statements is true? O a. Activity-based costing typically provides less information about product costs while requiring more recordkeeping. O b. Activity-based costs per unit are always greater than volume-based costs per unit. O c. All the statements are false. O d. Different cost allocation methods are constructed so that they typically result in the san similar estimates of how much it costs to make a product.

Which of the following statements is true? O a. Activity-based costing typically provides less information about product costs while requiring more recordkeeping. O b. Activity-based costs per unit are always greater than volume-based costs per unit. O c. All the statements are false. O d. Different cost allocation methods are constructed so that they typically result in the san similar estimates of how much it costs to make a product.

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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Explain how a plantwide overhead rate, using a unit-based driver, can produce distorted product costs. In your answer, identify two major factors that impair the ability of plantwide rates to assign cost accurately.
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When might activity-based costing be preferred over using a relative amount of product sales in allocating selling and administrative expenses to products?
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Activity-based costing is preferable in a system: when multiple products have similar product volumes and costs with a large direct labor cost as a percentage of the total product cost with multiple, diverse products where management needs to support an increase in sales price
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