Which of the following are considered to be benefits of activity-based costing (ABC)? 1. More accurate product costs 2. Reduced complexity of calculating costs 3. Inclusion of non-manufacturing costs 4. More detailed understanding of what drives cost. a. 1, 3 and 4 b. 2, 3 and 4 c. 1, 2 and 3 d. 1, 2 and 4

Which of the following are considered to be benefits of activity-based costing (ABC)? 1. More accurate product costs 2. Reduced complexity of calculating costs 3. Inclusion of non-manufacturing costs 4. More detailed understanding of what drives cost. a. 1, 3 and 4 b. 2, 3 and 4 c. 1, 2 and 3 d. 1, 2 and 4

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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1. Activity based costing is likely a more advantageous costing methold versus traditonal costing, to facilliate which of the following type of analysis? a) analysis of service organization cost b) analysis of channel profitablity c) analysis of long term profitablity d) analysis for reduction selling price of all products? 2. A ___ is any factor that causes a change in the cost of an activity. a) activity based cost b) cost pool c) cost driver d) standard 3. Which of the following is no a basic cost category for indirect cost? a) inventory financing cost b) Volume related cost c) Product batch cost d) activity based cost
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Identify one characteristic in organisation that make then more suited to using ABC method as opposed to the traditional costing method. Provide a reason for your answer.