Which of the following points about the Activity-based costing (ABC) system is NOT a correct observation: a. Under ABC the unit cost of a product will necessary be less than the unit cost under traditional full (absorption) costing. b. Activities are considered resource drivers because they eat up resources necessary for the activities to happen. c. ABC may generate results that are not suitable for external reporting under IFRS/GAAP. d. Batch-level activities produce costs that may be in proportion to the number of units produced.
Which of the following points about the Activity-based costing (ABC) system is NOT a correct observation: a. Under ABC the unit cost of a product will necessary be less than the unit cost under traditional full (absorption) costing. b. Activities are considered resource drivers because they eat up resources necessary for the activities to happen. c. ABC may generate results that are not suitable for external reporting under IFRS/GAAP. d. Batch-level activities produce costs that may be in proportion to the number of units produced.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Which of the following points about the Activity-based costing (ABC) system is NOT a correct observation:
| a. |
Under ABC the unit cost of a product will necessary be less than the unit cost under traditional full (absorption) costing. |
|
| b. |
Activities are considered resource drivers because they eat up resources necessary for the activities to happen. |
|
| c. |
ABC may generate results that are not suitable for external reporting under IFRS/GAAP. |
|
| d. |
Batch-level activities produce costs that may be in proportion to the number of units produced. |
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