Question
Which of the following statements concerning the activity based costing(ABC) template iscorrect?(answers assume the two column approach taught in class isused) A. Cost distortion exists
Which of the following statements concerning the activity based costing(ABC) template iscorrect?(answers assume the two column approach taught in class isused)
A.
Cost distortion exists if the MOH allocated to a cost object under traditional costing differs from the MOH allocated to the same cost object under ABC.
B.
If the cost object is beingovercosted, the total cost calculated in the ABC column will be higher than the total cost calculated in the traditional column.
C.
The numerator in the traditional POHR calculation is greater the sum of the numerators in the ABC POHR calculations.
D.
If a company has four costobjects, the cost distortion for two of the objects chosen at random would always be"equal andoffsetting."
E.
Direct material and direct labor for a specific cost object differ between the traditional and the ABC columns.
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