CIMAPRO19-P01-1 Exam - Topic 9 Question 33 Discussion

Question

Assume that you have made profit calculations based on standard profit calculation methods and activity based costing methods.

In which ways will this information be beneficial to the management team?

Select all the true statements.

Dorothy · Accepted Answer

A) Under an activity based costing system the various support activities that are involved in the process of making products or providing services are identified. and B) The cost drivers that cause a change to the cost of activities are also identified and used as the basis to attach activity costs to a particular product or service. and D) The identification of cost drivers provides information to management to enable them to take actions to improve the overall profitability of the company.

Dorothy · Answer

C) Through the tracing of costs to product in this way ABC establishes less accurate costs for the product or service.

Dorothy · Answer

E) Operational analysis will provide information to management on how costs can be incurred and managed.