Which of the following costing methods is a before-the-fact simplification method that eliminates the first stage of assigning costs to activities of activity-based costing (ABC) system and dramatically simplifies the assignment of cost of resources to activities?
A)Functional-based costing
B)Duration-based costing
C)Absorption costing
D)Batch-level costing

Question

Quizplus · Accepted Answer

Duration-based costing is a before-the-fact simplification method that eliminates the first stage of assigning costs to activities of activity-based costing (ABC) system and dramatically simplifies the assignment of cost of resources to activities. The method assigns the resource cost to activities based on the duration of the activity. This method is less precise than ABC but requires less effort to implement. The other options are not related to this approach.

Which of the Following Costing Methods Is a Before-The-Fact Simplification