What are the main advantages of traditional volume-based allocation methods compared to activity-based costing?
A) Traditional volume-based methods are easier to use and less costly to implement and maintain.
B) Traditional volume-based methods are more accurate and allowed by GAAP.
C) Traditional volume-based methods are less accurate and easier to use.
D) Traditional volume-based methods are harder to use and more costly to implement and maintain.
E) There are no advantages to using traditional volume-based methods.

Question

Quizplus · Accepted Answer

Traditional volume-based methods are generally easier to understand and require less effort and resources to implement and maintain compared to activity-based costing, which typically involves gathering more detailed data and analyzing it in a more complex manner. Additionally, volume-based methods are still allowed by GAAP and can still provide reasonably accurate cost information for many businesses.

What Are the Main Advantages of Traditional Volume-Based Allocation Methods