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Which of the following statements is TRUE about the activity based costing system when compared to absorption costing method?
Suggested Answer: C
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10 comments · newest first
PA
Paris
12 months ago
Yeah, I've heard ABC can be costly to implement too.
GR
Grover
12 months ago
I thought ABC was more detailed, not less!
CH
Chu
1 year ago
Wait, isn't ABC harder to manage?
CO
Corinne
1 year ago
Totally agree, absorption costing can be misleading.
NG
Nguyet
1 year ago
ABC provides more accurate overhead allocation for sure.
PA
Paul
1 year ago
I’m confused about the administration costs; I thought ABC was more complex, which could mean it costs more to run than absorption costing.
AM
Ammie
1 year ago
I practiced a similar question, and I think the key difference is that ABC focuses on activities, so it might be more accurate overall.
SH
Shawnda
1 year ago
I'm not entirely sure, but I feel like ABC is actually more detailed than absorption costing, which makes me lean away from B.
LE
Leontine
1 year ago
I think I remember that ABC is supposed to give a more accurate overhead allocation, so maybe C is the right answer?
LA
Lashandra
1 year ago
Hmm, I'm a bit confused by the wording here. I'll need to think this through carefully.