Question

Activity-based costing has most to offer when: A. overhead is low and non-volumedriven B. overhead is...

Activity-based costing has most to offer when:

A. overhead is low and non-volumedriven

B. overhead is low and volume driven

C. overhead is high and non-volume driven

D. overhead is high and volume driven

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Activity-based costing has most to offer when:

Answer : C. overhead is high and non-volume driven

Explanation

ABC is costing method that identify activities in organisation and allocate the cost of each activity to all product and service as per actual consumption by each.

In other words Activity based costing first assigns cost to activity and then assigns the cost of those activities only to the products that are actually demanding the activities and it is most used when overhead is high and non-volume driven.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Which of the following statements are true regarding Activity-Based Costing? Select one: A. Non-manufacturing costs are...
Which of the following statements are true regarding Activity-Based Costing? Select one: A. Non-manufacturing costs are not important to include when calculating the cost of each product. B. Costs are allocated based on a pre-determined overhead rate for each cost pool. C. Transitioning from traditional costing methods to Activity-Based Costing is a relatively simple process that most companies complete quickly. D. Activity-Based Costing results in a different amount of total overhead applied than under traditional costing methods. E. None of...
1. Which of the following procedures best describes activity-based costing? Select one: A. All overhead costs...
1. Which of the following procedures best describes activity-based costing? Select one: A. All overhead costs are recorded as expenses as incurred. B. Overhead costs are assigned to departments; then costs are assigned to products. C. Overhead costs are assigned directly to products. D. Overhead costs are assigned to activities; then costs are assigned to products. 2. Which of the following product costing methods produces the most precise product costing information? Select one: A. Activity-based costing B. Departmental overhead rate...
Which of the following statements is true of activity-based costing? A) In activity-based costing, direct labor-hours...
Which of the following statements is true of activity-based costing? A) In activity-based costing, direct labor-hours is always the best allocation base to allocate all non-manufacturing indirect costs B)  The main advantage of activity-based costing over peanut-butter costing is the accurate distribution of all direct costs to the products. C)  Activity based costing broadly averages or spreads the cost of resources uniformly to cost objects such as products or services. D)  Activity based costing is more useful to companies with high product diversity...
Volume-based costing allocates indirect product costs based on the volume of output, using such allocation bases...
Volume-based costing allocates indirect product costs based on the volume of output, using such allocation bases as direct labor hours, machine hours, or the amount of direct material used in the production process. Activity-based costing (ABC) has consistently shown that Volume-based costing ___________ the cost of high volume products and ______________ the cost of low volume products. High Volume Products Low Volume Products A. Overstates Overstates B. Overstates Understates C. Understates Overstates D. Understates Understates Option A Option B Option...
Whirlpool Corporation conducted an activity-based costing study of its Evansville, Indiana, plant in order to identify...
Whirlpool Corporation conducted an activity-based costing study of its Evansville, Indiana, plant in order to identify its most profitable products. Assume that we select three representative refrigerators (out of 333): one low-, one medium-, and one high-volume refrigerator. Additionally, we assume the following activity-base information for each of the three refrigerators: Three Representative Refrigerators Number of Machine Hours Number of Setups Number of Sales Orders Number of Units Refrigerator—Low Volume 50 15 45 250 Refrigerator—Medium Volume 360 14 100 1,800...
Which of the following statements about activity-based costing is correct? A. Activity-based costing and activity-based management...
Which of the following statements about activity-based costing is correct? A. Activity-based costing and activity-based management techniques are not limited to manufacturing companies. Service providers may benefit from implementing activity-based management, but the cost and time of activity-based costing far exceeds the benefits. B. Activity-based .costing and activity-based management techniques are limited to manufacturing companies. Service providers, non-profit organizations, retailers, and governments cannot benefit from implementing some form of activity-based costing and activity-based management because they are prohibitively expensive. C....
Bevo, Inc. uses an activity based costing system. The company has the following overhead costs: Overhead...
Bevo, Inc. uses an activity based costing system. The company has the following overhead costs: Overhead Cost Amount Factory Supplies $300,000 Maintenance Costs $400,000 Indirect Salaries $200,000 After a thorough review of the activities that drive these costs, management of Bevo, Inc. has determined the percentage of these costs that are used by each activity. These are included in the table below: Setups Cost Pool Production Cost Pool Factory Supplies 20% 80% Maintenance Costs 65% 35% Indirect Salaries 80% 20%...
the method of determining overhead allocation using absorption costing and that under activity-based costing differs because:...
the method of determining overhead allocation using absorption costing and that under activity-based costing differs because: a. activity-based costing allocates costs to cost pools and traces costs to products based on cost driveres whereas absorption costing allocates costs to cost centers and then to products based on a measure of activity such as direct labor hours b. activity-based costing can never accurately allocate overheads to products because the method of allocation is arbitrary whereas absorption costing is always more reliable...
describe how assigning overhead costs differ under a simple activity based product costing system from a...
describe how assigning overhead costs differ under a simple activity based product costing system from a conventional volume-based costing system?
A company has two products: A and B. It uses activity-based costing and has prepared the...
A company has two products: A and B. It uses activity-based costing and has prepared the following analysis showing budgeted cost and activity for each of its three activity cost pools: Budgeted Activity Activity Cost Pool Budgeted Cost Product A Product B Activity 1 $ 89,000 3,200 3,000 Activity 2 $ 64,000 4,700 5,700 Activity 3 $ 97,000 2,700 5,450 Annual production and sales level of Product A is 34,500 units, and the annual production and sales level of Product...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT