Which of the Following Is a Characteristic of Calculating Standard

question 26

Multiple Choice

Which of the following is a characteristic of calculating standard cost variances for manufacturing overhead costs under an activity-based cost (ABC) system?

• A) Only non-volume-related cost drivers are used in the cost-allocation process.
• B) An ABC system would likely have a greater number of standard cost variances reported each period.
• C) Fewer variances need to be reported, compared to the number of overhead variances calculated under a traditional cost system.
• D) Flexible budgets are used for planning but not cost-control purposes.
• E) The flexible-budget variance will be the same under both a traditional cost system and an ABC system.

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