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Assume you have two product lines, the basic line and the deluxe line. The basic line has 12 components that need to be sourced and
Assume you have two product lines, the basic line and the deluxe line. The basic line has 12 components that need to be sourced and purchased through the purchasing department, while the deluxe line has 75 components to source and purchase. Which costing method may be more effective? Activity based costing would give a clearer picture of the cost of purchasing components Activity based costing since the raw materials for the deluxe line will be more costly O Traditional costing, since the purchasing department is most likely paid on salary
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