Regarding the use of ABC product cost information for short-term decision making, which of the following is likely to be true?
A) Flexible costs should be excluded from the computation of product cost
B) Committed costs should be excluded from the computation of product cost
C) ABC product cost information should not be used for most short-term decisions
D) ABC product cost information cannot be used for decision making when there are constrained resources

Question

Quizplus · Accepted Answer

Committed costs, which are long-term, fixed costs not easily altered in the short term (such as depreciation or rent), should be excluded from the computation of product cost for short-term decision making. Activity-Based Costing (ABC) focuses on assigning costs more accurately to products based on the activities they require, but for short-term decisions, variable or direct costs are more relevant than fixed, committed costs.

Regarding the Use of ABC Product Cost Information for Short-Term