Question
What are the key reasons for product cost differences between traditional costing systems and ABCsystems? Select all that apply. A. An ABC costing system generally
What are the key reasons for product cost differences between traditional costing systems and ABCsystems?
Select all that apply.
A.
An ABC costing system generally utilizes one or very few indirect cost pools to allocatecosts, where a simple costing system uses multiple indirect cost pools to allocate costs.
B.
An ABC approach focuses on the units of output as the fundamental costobjects, whereas a simple costing system generally does not.
C.
The ABC costing system has more indirect costs than a simple costingsystem, which classifies as many indirect costs as direct costs as possible.
D.
An ABC approach traces more costs as directcosts, where a simple costing system has a larger proportion of costs as indirect costs.
E.
An ABC approach attempts to use cost drivers as the allocation base for indirectcosts, whereas a simple costing system generally does not.
F.
For eachactivity-cost pool, an ABC approach seeks acost-allocation base that has acause-and-effect relationship with costs in the cost pool.
G.
An ABC approach create homogeneous cost pools linked to differentactivities, whereas a simple costing system has one or a few heterogeneous cost pools.
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