Which of the following are considered to be benefits of activity-based costing (ABC)? 1. More accurate product costs 2. Reduced complexity of calculating costs 3. Inclusion of non-manufacturing costs 4. More detailed understanding of what drives cost. a. 1, 3 and 4 b. 2, 3 and 4 c. 1, 2 and 3 d. 1, 2 and 4

Which of the following are considered to be benefits of activity-based costing (ABC)? 1. More accurate product costs 2. Reduced complexity of calculating costs 3. Inclusion of non-manufacturing costs 4. More detailed understanding of what drives cost. a. 1, 3 and 4 b. 2, 3 and 4 c. 1, 2 and 3 d. 1, 2 and 4

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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PLEASE ANSWER ALL 4. A cost management system will provide the means to developa. The most accurate product or service costs.b. A reasonably accurate product or service costs given cost-benefit analysis.c. A product or service costs that does not include any non-value added overhead.d. A costing system that traces all costs directly to individual products or services. 5. The cost generated by the cost management system are used toa. Assess product / service profitability.b. Establish price for products with significant competition.c. Determine underlying reasons for variations from standards.d. All statements in the choices.
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Identify one characteristic in organisation that make then more suited to using ABC method as opposed to the traditional costing method. Provide a reason for your answer.