Effect of alternative costing systems on decisions
Traditional volume-based product costing systems and activity-based costing systems have been presented as alternative methods to use to determine product costs.
i. In a traditional volume-based costing system, costs are classified as fixed and variable. In an activity-based costing system, costs are classified into four categories. List those four categories.
ii. Is it possible for the quantitative analysis to differ depending on whether data is developed from a traditional volume-based costing system or an activity-based costing system? If so, explain which of the four categories of cost in question (i) are likely to cause the difference.

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Traditional volume-based product costing systems and activity-based costing systems have been presented as alternative methods to use to determine product costs.
i. In a traditional volume-based costing system, costs are classified as fixed and variable. In an activity-based costing system, costs are classified into four categories. List those four categories.
ii. Is it possible for the quantitative analysis to differ depending on whether data is developed from a traditional volume-based costing system or an activity-based costing system? If so, explain which of the four categories of cost in question (i) are likely to cause the difference.

Effect of Alternative Costing Systems on Decisions