Which of the following statements is true?O The first step in activity-based costing is to assign overhead costs to products using cost driversABC usually results in less appropriate management decisionsActivity-based costing allocates overhead to multiple activity cost pools and assigns the cost pools toproducts using cost driversO Traditional costing systems use multiple predetermined overhead rates

there are different method that is followed in the costing for the analyzation of the different cost…

Which of the following statements is true? O The first step in activity-based costing is to assign overhead costs to products using cost drivers O ABC usually results in less appropriate management decisions O Activity-based costing allocates overhead to multiple activity cost pools and assigns the cost pools to products using cost drivers O Traditional costing systems use multiple predetermined overhead rates

Which of the following statements is true? O The first step in activity-based costing is to assign overhead costs to products using cost drivers O ABC usually results in less appropriate management decisions O Activity-based costing allocates overhead to multiple activity cost pools and assigns the cost pools to products using cost drivers O Traditional costing systems use multiple predetermined overhead rates

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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Which of the following statements about activity-based costing (ABC) is false? Group of answer choices In activity-based costing, cost drivers are what cause costs to be incurred. Activity-based costing is more likely to result in major differences from traditional costing systems if the firm manufactures only one product rather than multiple products. Activity-based costing is useful for allocating marketing and distribution costs. Activity-based costing differs from traditional costing systems in that it allocates costs according to the rates at which a product consumes different activities.
When a company implements activity-based costing, manufacturing overhead cost is often shifted from low volume products to high volume products, with a higher unit cost resulting for the high volume products. Please explain (True or False) thoroughly.
Which of the following conditions would favour the use of activity-based costing (ABC) rather than traditional absorption costing? (1) Overheads represent a large proportion of total cost (2) A diverse product range with complex manufacturing operations (3) Overheads are primarily driven by volume of output O 1, 2 and 3 O 2 only O 1 and 3 only O 1 and 2 only
The following statements have been made in relation to activity-based costing: 1. A cost driver is a factor which causes a change in the cost of an activity. 2. Traditional absorption costing tends to underestimate overhead costs for high-volume products. Which of the above statements is/are true? O A. 1 only O B. 2 only OC. Neither 1 nor 2 O D. Both 1 and 2
Which of the following statements regarding activity-based costing (ABC) is NOT correct? a. Under ABC cost centres are replaced by cost pools b. Blanket overhead recovery rates (OAR) are replaced with cost driver rates c. ABC uses one common overhead recovery rate, such as labour hours. d. ABC tackles the problems of absorption costing by adopting a much more accurate way of charging overhead to cost units.
Please answer with reason for all why the option is correct and why the other options are incorrectPlease answer correct otherwise skip it 4. Which of the following statements is true? An activity measure in activity-based costing expresses how much of an activity is carried out and it is used as the allocation base for assigning overhead costs to products and services. Activity-based management involves focusing on activities to eliminate waste, decrease processing time, and reduce defects. An activity-based costing system is generally more difficult to set up and run than a traditional cost system. Multiple Choice Statements I and II are true. Statements II and III are true. All of the statements are true. None of the statements are true.
Since overhead costs are indirect costs, Group of answer choices they require some process of allocation. they can be easily traced to production. they cannot be allocated. a predetermined overhead rate is not advantageous.