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Which of the following statements is FALSE? A) Traditional costing systems generally assign only production costs...

Which of the following statements is FALSE? A) Traditional costing systems generally assign only production costs to products. B) Traditional costing systems use a single cost pool for all indirect production costs. C) Traditional cost systems work well with simple production processes. D) Traditional cost systems allocate a cost pool to cost objects using multiple cost drivers. E) all the above

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Answer #1

Answer- The Correct answer is D) Traditional cost systems allocate a cost pool to cost objects using multiple cost drivers.

Because Under Traditional costing only a single cost driver is Used (eg- Machine Hours, Labour Hours etc), However under Activity based costing Multiple cost Drivers are Used.

A) is True as Traditional cost Helps in assigning Indirect Overheads to Products.

B) is True as under Traditional costing Single Cost pool is Determined.

C) is True as under Traditional costing is used when few Products are Produced.

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