Question

Which one of the following is the main difference between traditional product costing and activity-based costing? Question 13 options:

The inclusion of direct materials and overhead expenses

The exclusion of selling and administrative expenses

The inclusion of selling and administrative expenses

The exclusion of direct materials and overhead expenses

Answer 1

Activity-based costing is more exact in light of the fact that it considers vital factors previously doling out an expense to an item. Notwithstanding, for this equivalent reason, it is more confused and tedious. It's additionally more exhaustive and considers non fabricating costs also, for example, administrative and administrative expenses.

Traditional costing is a considerably less demanding method for deciding the expense of an item, since it depends exclusively on doling out normal overhead rates. This likewise implies it won't generally be as exact, in light of the fact that it doesn't factor in non fabricating costs or figure out which overhead expenses really influence particular items.

Thus, correct answer is C, inclusion of selling and administrative expense in activity based costing.