COST ACCOUNTING
ACTIVITY BASED MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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What is not correct about ABC:
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Less accurate
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Difficult to implement
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Time consuming
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Massive amount of data
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Explanation:
Detailed explanation-1: -Answer and Explanation: The answer is (c) It requires few calculations to determine the costs of products and services.
Detailed explanation-2: -Fewer cost pools used to assign overhead costs to products is not a benefit of activity based costing.
Detailed explanation-3: -Activity based costing systems are more accurate than traditional costing systems. This is because they provide a more precise breakdown of indirect costs. However, ABC systems are more complex and more costly to implement.
Detailed explanation-4: -Accordingly, the preparation of allocation matrices is not normally associated with ABC costing. It is usually used in the based-cost allocation method.
There is 1 question to complete.