Why would a company choose to use activity based costing vs the single department method or the multiple department method?

Q: Absorption costing and marginal costing are product costing methods used in organizations. Briefly…

A: Introduction:- Absorption costing, often known as "full costing," is a managerial accounting…

Q: Companies can choose from different costing methods: process/product costing and activity-based…

A: Process costing: Process costing is used when there is a continuous manufacturing process. The…

Q: Activity-based costing is preferable in a system: A. when multiple products have similar product…

A: ABC is an accounting method that is used to trace the total cost of activities necessary to make a…

Q: 4. Using the activity-based product costs as the standard, comment on the ability of departmental…

A: 1. Calculation of overhead cost per unit for each product using a plantwide rate based on direct…

Q: What is the basic difference between absorption costing and variable costing?   What are the…

A: Product costs are those kinds of costs which is related to the procedure of production directly like…

Q: How should a company decide on the number of cost pools it should use to allocate costs to…

A: Costing: Costing is a technique used in cost accounting to determine the cost of a product. With the…

Q: The target costing is a cost management technique. Discuss the advantages of using this technique…

A: Definition:   Target costing: A costing system that emphasizes on the minimization of existing and…

Q: The relevant range of activity costing is: Select one: O a. Is the cost that causes change in total…

A: Under activity costing, indirect costs or overhead are allocated to products or jobs on the basis of…

Q: 1. What types of costs are allocated? What is a support department? What is a producing department?…

A: Allocation refers to distribution of total overhead cost to the departments that have actually used…

Q: How is the distinction between direct and indirect costs handled differently under volume-based…

A: Activity-based costing: It is a method that helps in finding the activities performed by a company…

Q: How can activity-based costing be used to switch the management of business activities from a…

A:

Q: Traditional Volume-based costing allocates indirect product costs based on the volume of output,…

A: Following is the answer to given question

Q: Which of the following statements about activity-based costing is not true? A. activity-based…

A: Activity-based costing can be defined as the method of assigning and allocating the overhead and…

Q: Comparison between ABC and Traditional costing

A: Traditional costing is also written as volume based costing. Under this method, overheads are…

Q: What is the difference between variable and absorption costing. How does these variable costing help…

A: Absorption costing is a costing mechanism where all the costs related to the production are assigned…

Q: activity-based costing is preferable in a system a) when multiple products have similiar product…

A: To assign overhead costs to products, the methodology which is used is called Activity-Based…

Q: What is meant by customer profitability analysis as it relates to activity based costing? Give an…

A: In determining the profitability of customer relationships through customer profitability analysis…

Q: Which of the following statements about activity-based costing is not true? A. activity-based…

A: ABC(Activity Based Costing) is a methodology for more precisely allocating overhead costs by…

Q: Explain the variable costing income statement and provide a hypothetical example of a variable…

A: Income statement is prepared to assess the performance of a firm for an accounting period. Income…

Q: How to allocate indirect costs to multiple departments using an ABC costing driver?

A: Overhead means the cost incurred indirect in factory for the production of goods. Manufacturing…

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 not correct regarding activity-based costing Activity-based costing…

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

Q: What is standard costing, and when is it used? Give an example of a well-known company that you…

A: Standard Costing:   It is an accounting system that is used by organization to identify the…

Q: Companies that produce a variety of products need a costing system that allocates costs based on the…

A: Companies that produce a variety of products need a costing system that allocates costs based on the…

Q: How can variable costing be used in service companies?

A: Variable Costing: The variable costing is the method of costing in which only the variable…

Q: Which of the following statements is true of activity-based costing? O a. ABC ignores the allocation…

A: Activity based costing represents the costing method where the company identifies the cost pools and…

Q: How are the current practices of life cycle costing and target costing in cost management different…

A: The target costing is inferred by deducting the overall revenue from the market selling value, that…

Q: Discuss any two differences between the traditional costing system and the actively-based costing…

A: Traditional  Costing…

Q: Which of the following statements is true of activity-based costing? The main advantage of…

A: The costing method in which the manufacturing overhead costs are assigned to the goods or services…

Q: Which of the following is NOT a reason for companies to assign costs to products or services? O to…

A: Generally companies will asign costs to products and services for decision making purpose

Q: Why does activity-based costing appeal to some companies?

A: Introduction: In the ABC system, various overhead rates refer to all categories of overhead costs,…

Q: Do companies in either the service sector or the merchandising sector make choices about absorption…

A: Variable Costing:The variable costing is a method used to allocate the fixed manufacturing overhead…

Q: What is the right cost hierarchy in Activity-Based-Costing ABC Select one: O a. Organization,…

A: Activity based costing means costing method in which all indirect costs or overheads are allocated…

Q: Explain why service companies use different activity bases than manufacturing companies to classify…

A: Service companies are those companies which provide services to their clients  such as…

Q: Companies can choose from different costing methods: process/product costing and activity-based…

A: Different methods of costing are used in different companies for assigning cost to the manufactured…

Q: How would you explain to a company’s management the primary difference between traditional and…

A: A system that is used for assigning the total cost incurred to different elements of business is…