Which of the following statements is correct?
A) Activity-based costing is a more detailed and complex costing method than is just-in-time costing.
B) Activity-based costing and just-in-time costing are incompatible.
C) Activity-based costing is a simplified cost system that does not track costs through the sequence of manufacturing operations.
D) Activity-based costing is less informative than a traditional costing system.

Question

Quizplus · Accepted Answer

Activity-based costing (ABC) is indeed a more detailed and complex costing method compared to traditional costing systems, including just-in-time (JIT) costing. ABC assigns costs to products based on the activities involved in production, aiming to more accurately reflect the resources consumed by each product. This approach contrasts with simpler or less detailed methods, such as just-in-time costing, which focuses on reducing inventory costs and may not provide as detailed insights into the specific costs of activities within the production process.

Which of the Following Statements Is Correct