Activity-based costing and generally accepted accounting principles differ in that ABC
A)does not define product costs in the same manner as GAAP.
B)cannot be used to compute an income statement,but GAAP can.
C)is concerned only with costs generated from automated processes,but GAAP is concerned with costs generated from both manual and automated processes.
D)information is useful only to managers,while GAAP information is useful to all organizational stakeholders.

Question

Quizplus · Accepted Answer

Activity-based costing does not define product costs in the same manner as GAAP. While GAAP follows a traditional cost accounting approach where costs are allocated based on direct labor or machine hours, ABC identifies the specific activities that drive costs and assigns those costs based on their consumption by products or services.

Activity-Based Costing and Generally Accepted Accounting Principles Differ in That