Compared to a traditional costing system, an activity-based costing system usually involves
A) Fewer cost pools
B) More cost pools
C) bigger cost pools
D) b and c

Question

Quizplus · Accepted Answer

An activity-based costing system usually involves more cost pools than a traditional costing system. This is because it allocates costs based on activities and cost drivers, rather than using broad cost categories. By using more specific cost pools, ABC provides a more accurate allocation of costs to products or services.

Compared to a Traditional Costing System, an Activity-Based Costing System