Activity-based costing (ABC)can refine and improve cost allocations using either job-order or process cost systems.There are three significant differences between ABC and traditional cost accounting approaches.One difference between the two systems is how clearly the results of management activities are measured on overall profitability.This benefit is better known as
A)batch related overhead.
B)improved cost management.
C)product related overhead.
D)improved cost drivers.

Question

Quizplus · Accepted Answer

ABC differs from traditional cost accounting approaches by providing improved cost management, which means that the results of management activities are measured on overall profitability in a clearer manner. This is because ABC assigns costs to products and services based on their actual consumption of resources, rather than relying on arbitrary allocation methods. The other options listed are not the best choice because they do not adequately describe the difference between ABC and traditional cost accounting.

Activity-Based Costing (ABC)can Refine and Improve Cost Allocations Using Either