Asked by
Maximo Aristy
on Dec 05, 2024Verified
Which of the following statements is/are true?
i. Both traditional cost systems and ABC focus on resources supplied.
ii. Plant and equipment is an example of a committed resource under an ABC system.
iii. Committed resources always equal resources used.
A) i
B) ii
C) iii
D) ii and iii
ABC System
Activity-Based Costing System; a method of allocating overhead and indirect costs to specific products or services based on the activities they require.
Traditional Cost Systems
Traditional cost systems allocate overhead costs based on measures like direct labour hours or machine hours, often resulting in less accurate product costing.
Committed Resource
Assets or inputs that a company has dedicated to a certain project or operational activity, reflecting a long-term investment or commitment.
- Acquire knowledge about the essential tenets of activity-based costing (ABC) and how this differs from classic costing systems.
Verified Answer
JK
Learning Objectives
- Acquire knowledge about the essential tenets of activity-based costing (ABC) and how this differs from classic costing systems.