Question

Answer the following questions based on​ activity-based costing​ (ABC):

ABC can only be used in a​ job-costing system.

True

False

​Batch-level activities are one level within the ABC cost hierarchy.

True

False

ABC is beneficial for companies at high risk of cost distortion because it allocates overhead based on the resources used by each​ product, and the extent to which they use them.

True

False

ABC uses only one cost driver when allocating overhead.

True

False

Answer 1

1	ABC can be used in costing system other than Job order such as standard cost or uniform costing
	So False
2	There are various level of activities under ABC such as:Product level,Batch level,Unit level
	So True
3	The statement is True it is used by company which have multiple product lines and the risk of distortion is higher
	So True
4	ABC uses various cost driver for overhead allocation based on the nature of activity such as No. of setup for setting up cost
	No. of processes for processing cost and such
	So False