Which of the following is a characteristic of calculating standard cost variances for manufacturing overhead costs under an activity-based cost (ABC) system?
A) Only non-volume-related cost drivers are used in the cost-allocation process.
B) An ABC system would likely have a greater number of standard cost variances reported each period.
C) Fewer variances need to be reported, compared to the number of overhead variances calculated under a traditional cost system.
D) Flexible budgets are used for planning but not cost-control purposes.
E) The flexible-budget variance will be the same under both a traditional cost system and an ABC system.

Question

Quizplus · Accepted Answer

In an ABC system, there are typically more cost pools and cost drivers used for allocating manufacturing overhead costs, which will result in a greater number of standard cost variances being reported each period compared to a traditional cost system.

Which of the Following Is a Characteristic of Calculating Standard