Many traditional costing systems:
A) trace manufacturing overhead to individual activities and require the development of numerous activity-costing rates.
B) write off manufacturing overhead as an expense of the current period.
C) combine widely varying elements of overhead into a single cost pool.
D) use a host of different cost drivers (e.g., number of production setups, inspection hours, orders processed) to improve the accuracy of product costing.
E) produce results far superior to those achieved with activity-based costing.

Question

Quizplus · Accepted Answer

Traditional costing systems often combine various overhead costs into a single cost pool, rather than tracing them to specific activities or using multiple cost drivers, which can lead to less accurate product costing compared to activity-based costing systems.

Many Traditional Costing Systems