COST ACCOUNTING
ACTIVITY BASED COSTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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accessible accounting and information systems expertise to maintain the system
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numerous products that consume different amounts of resources
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a highly competitive environment, where cost control is critical
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operations that remain fairly consistent
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Detailed explanation-1: -Activity-based costing gives managers more accurate production costs. This can help businesses make more informed decisions about which products to produce or help them find cheaper methods of production. It can also help when determining pricing for individual products.
Detailed explanation-2: -Activity-based costing will benefit most companies with high overhead costs and diverse products and processes. If there is little overhead or if there is a single product, the allocation process will not result in significantly different product costs.
Detailed explanation-3: -Activity-based costing is especially useful to allocate indirect costs to items that are difficult to track and assign. The main benefit is more accurate product overhead costing.
Detailed explanation-4: -Fewer cost pools used to assign overhead costs to products is not a benefit of activity based costing.