Cost Accounting Quiz #4
uniformly spread across various products
Product-cost cross-subsidization is very common when costs are
- ABC is generally perceived to produce superior costing figures due to the use of multiple drivers across multiple levels. - ABC is only as good as the drivers selected, and their actual relationship to costs. Poorly chosen drivers will produce inaccurate costs, even with ABC
ABC Costing vs. Simple Costing
its benefits exceed its implementation costs
It only makes sense to implement an ABC system when ________
identify new designs to reduce costs
ABC systems help managers to _______
are not cross-subsidized by support costs being shared by everyone
Activity-based costing differs from traditional costing systems in that products
means that if a company undercosts one of its products, it will overcost at least one of its other products
Product-cost cross-subsidization ________.
Activity-based costing classifies some of the indirect costs as direct costs
Which of the following statements is true of activity-based costing?