Which of the following describes the product costing continuum?
A) It describes the range of options for allocating overhead to products from simplest to most complex.
B) It is an activity based costing model that considers all costs along the value chain as part of a product's cost.
C) It is an approach to assigning direct and indirect costs that considers the full range of. products and services offered.
D) It refers to the continuous improvement mentality needed to achieve lower product costs.

Question

Quizplus · Accepted Answer

The product costing continuum describes the different methods for allocating overhead costs to products, ranging from simple methods to more complex methods that take into account more factors.

Answer: B
 Activity based costing (ABC) is a specific product costing model that considers all costs along the value chain as part of a product's cost. It is not necessarily the same as the product costing continuum, which describes a broader range of costing methods.

Answer: C
 This statement is similar to the explanation for answer B. It describes an approach to assigning costs that considers the full range of products and services offered. However, it does not necessarily imply the use of activity based costing or the product costing continuum.

Answer: D
 This statement is not related to the product costing continuum. It refers to a philosophy of continuous improvement in reducing product costs over time.

Which of the Following Describes the Product Costing Continuum