The implications of JIT and backflush costing systems for activity-based costing systems include:
A)more of the costs are direct
B)overhead cost allocations are reduced
C)Neither of these answers is correct.
D)Both of these answers are correct.

Question

Quizplus · Accepted Answer

JIT and backflush costing systems focus on reducing inventory and only assigning costs once goods are completed, leading to a higher proportion of direct costs. This, in turn, reduces the amount of overhead costs that need to be allocated, making activity-based costing more effective. Therefore, both choices A and B are correct.

The Implications of JIT and Backflush Costing Systems for Activity-Based