Question

Which of the following is not a cost system proposed as an extension to ABC systems,...

Which of the following is not a cost system proposed as an extension to ABC systems, with the overall goal of more accurately allocating manufacturing overhead costs to outputs?

Multiple Choice

  • Resource consumption accounting (RCA).

  • Flexible standard costing.

  • Target costing.

  • Variable costing.

Business   Accounting   
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Homework Answers

Answer #1

Option D is the correct answer.

Basis of Answer

Variable costing focuses on the variable components of a production process leaving fixed costs aside whereas Activity Based Costing is completely different to that variable costing it considers the relationship of a production process with all the costs that is either fixed or variable. The discussion clearly states that there is a difference in the ideology of both these concepts so variable costing can not be considered as an extension to Activity Based Costing for better and accurate allocation of overheads.

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