Characteristics of activity-based costing include:
A) a greater number of overhead cost application bases compared to traditional costing systems.
B) the overhead cost application bases are likely to be more accurate cost drivers than would be the case in traditional costing systems.
C) the simplicity of the system makes it easy to implement.
D) a greater number of overhead cost application bases compared to traditional costing systems AND the overhead cost application bases are likely to be more accurate cost drivers than would be the case in traditional costing systems.

Question

Quizplus · Accepted Answer

Activity-based costing involves using a greater number of overhead cost application bases compared to traditional costing systems, which means that costs are allocated more accurately to cost objects. Additionally, the overhead cost application bases are likely to be more accurate cost drivers, which means that costs are allocated more proportionately to the activities that drive them. This results in a more accurate costing system overall. However, the complexity of the system may make it more difficult to implement initially compared to traditional costing systems.

Characteristics of Activity-Based Costing Include