ABC Costing vs. Traditional Costing.Questions and answers are graded A+

ABC Costing vs. Traditional Costing
ABC Costing - answerAssigns overhead costs more accurately to products than simpler
costing methods.

ABC Costing - answerUses multiple allocation bases.

Traditional Costing - answerUse one single plant wide or department wide
predetermined overhead rate.

ABC Costing - answerEach major activity has its own overhead cost pool.

ABC Costing - answerOverhead costs are assigned to activity cost pools.

ABC Costing - answerCosts in the pools are allocated to products using activity rates
and activity measures.

Traditional Costing - answerUse plant wide or department wide cost pools.

Traditional Costing - answerThe departmental cost pools contain the costs of many
different types of activities.

ABC Costing - answerThe cost pools will only contain a single activity.

ABC Costing - answerThe cost of implementing may outweigh the benefits.

Traditional Costing - answerThe most common allocation base used is DLH or DMH.

Absorption Costing - answerFixed and variable costs are included in the cost of the
products.

Job Order Costing - answerCosts are traced and allocated to a job and then divided by
the number of units in the job.