A member of Southcott Co's finance team has said that activity based costing (ABC) provides more accurate product costs than a traditional absorption costing system. He gave a number of statements supporting this claim. Which of the following statements does NOT support his claim?
A、ABC uses cost drivers to allocate overhead costs to products by cost pool
B、ABC identifies value added and non-value added activities
C、ABC assigns overheads to each major activity
D、ABC uses both volume based and non-volume based cost drivers
A、ABC uses cost drivers to allocate overhead costs to products by cost pool
B、ABC identifies value added and non-value added activities
C、ABC assigns overheads to each major activity
D、ABC uses both volume based and non-volume based cost drivers
【参考答案及解析】
The results of ABC must be interpreted by management before they can be used to identify which activities add value and which do not. The other statements explain why ABC gives more accurate information than traditional absorption costing.
The results of ABC must be interpreted by management before they can be used to identify which activities add value and which do not. The other statements explain why ABC gives more accurate information than traditional absorption costing.