In VCA,which method of cost accounting is preferred?
A) Activity-based cost accounting
B) Value-based cost accounting
C) Traditional cost accounting
D) Financial cost accounting

Question

Quizplus · Accepted Answer

VCA (Value Chain Analysis) focuses on identifying the activities involved in creating a product or service and analyzing their cost effectiveness. Activity-based cost accounting is a method that analyzes the cost of each activity and assigns it to the product or service being created. This method is preferred in VCA because it provides a more accurate understanding of the cost of each activity involved in the value chain. It helps to identify areas where costs can be reduced or eliminated, which can ultimately lead to higher profit margins.

In VCA,which Method of Cost Accounting Is Preferred