Which of the following best explains the main advantages of time-driven-activity-based costing for services over the use of conventional ABC?
A) The number of services can more easily be expanded than under conventional ABC, since costs are assigned to unused capacity.
B) Theoretical capacity, used in this type of costing, allows service companies a better method to assess quality control than does conventional ABC.
C) Time-based resource and activity data is easy to collect and practical capacity is used by time-driven-activity-based costing.
D) The number of line items on a service's bill is minimized and practical capacity is used by time-driven-activity-based costing.
E) This type of costing allows service companies better information since their objectives when using ABC are different than those of manufacturing firms.

Question

Quizplus · Accepted Answer

Time-driven-activity-based costing simplifies the data collection process by focusing on the time spent on activities and uses practical capacity, making it easier to implement and understand compared to conventional ABC, which often requires detailed and complex allocation bases.

Which of the Following Best Explains the Main Advantages of Time-Driven-Activity-Based