In comparing a traditional costing systems with an activity-based costing system, which of the following would be considered a feature of a traditional cost system?
A) Dividing a large cost pool into multiple and varied smaller cost pools
B) Using a generic cost driver to allocate costs
C) Using activities undertaken in the value chain to determine smaller cost pools
D) Using relevant cost drivers to allocate costs

Question

Quizplus · Accepted Answer

This question requires you to consider the differences between traditional job costing system and activity-based costing system and to focus on the feature of a traditional costing system. Choices A, C, and D all represent advantages of using activity-based costing, so those responses are incorrect. Choice B represents a feature of using a traditional costing system and that makes it the correct selection.

In Comparing a Traditional Costing Systems with an Activity-Based Costing