Which statement is TRUE?Group of answer choicesActivity-Based Costing can only be used jointly with normal costing.Activity-Based Costing can improve the accuracy of product cost under a Job Costing setting more than under a Process Costing settingJob costing cannot be applied jointly with Activity-Based Costing.Process costing cannot be applied jointly with Job Costing.Activity-Based Costing can improve the accuracy of product cost under a Process Costing setting more than under a Job Costing setting.
Question
Which statement is TRUE?Group of answer choicesActivity-Based Costing can only be used jointly with normal costing.Activity-Based Costing can improve the accuracy of product cost under a Job Costing setting more than under a Process Costing settingJob costing cannot be applied jointly with Activity-Based Costing.Process costing cannot be applied jointly with Job Costing.Activity-Based Costing can improve the accuracy of product cost under a Process Costing setting more than under a Job Costing setting.
Solution
The statement "Activity-Based Costing can improve the accuracy of product cost under a Job Costing setting more than under a Process Costing setting" is TRUE.
Here's why:
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Activity-Based Costing (ABC) can be used with either normal costing or actual costing, not just normal costing. So, the first statement is FALSE.
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ABC is a method that assigns costs based on the activities that drive them. It can be used in both job costing and process costing settings. However, it is often more beneficial in a job costing setting where products are diverse and use resources differently. So, the second statement is TRUE.
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Job costing can be applied jointly with Activity-Based Costing. So, the third statement is FALSE.
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Process costing and job costing are two different methods of costing and are typically not used jointly. So, the fourth statement is TRUE, but it is not related to Activity-Based Costing.
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As mentioned in point 2, ABC can be used in both job costing and process costing settings. However, it is often more beneficial in a job costing setting where products are diverse and use resources differently. So, the fifth statement is FALSE.
Similar Questions
Select all that applyWhich of the following are true of activity-based costing?Multiple select question.Activity-based costing is based on the concept that products consume activities and activities consume resources.Activity-based costing uses a single cost pool for the entire plant.Activity-based costing is a two-stage product costing method.Activity-based costing is a single-stage product costing method.
Which statement is TRUE? Group of answer choicesA normal costing cannot be used jointly with a job costing system.A process costing system is more appropriate for service industries than a job costing system.A job costing system assigns direct material costs to products in the same manner as a process costing system does.A job costing system allocates direct costs to products; a process costing system does not assign direct costs to products.A normal costing cannot be used jointly with a process costing system.
Select all that applyWhich of the following are true of activity-based costing? Multiple select question.With activity-based costing, each activity has an associated cost pool.With activity-based costing, there is a single cost pool representing the entire plant.In the ABC two-stage cost system, the first stage consists of activities.In the ABC two-stage cost system, the first stage consists of departments.
Multiple Choice QuestionThe first step in applying activity-based costing isMultiple choice question.allocating overhead costs to cost objects.identifying the activities.compute rate for each activity.
Facility-level activities and costs are considered product costs in activity-based costing.Select one:TrueFalse
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