ABC systems are similar to traditional costing systems in the way they:
A) Allocate direct costs to cost objects
B) Define cost allocation bases
C) Trace direct costs to cost objects
D) Trace indirect costs to activities

Question

Quizplus · Accepted Answer

ABC (Activity-Based Costing) systems and traditional costing systems both trace direct costs directly to cost objects. The primary difference lies in how they handle indirect costs, with ABC systems allocating indirect costs based on activities that drive costs, rather than using a less specific allocation base as in traditional systems.

ABC Systems Are Similar to Traditional Costing Systems in the Way