Which of the Following Statements Comparing Traditional and Activity-Based Costing

question 27

Multiple Choice

Which of the following statements comparing traditional and activity-based costing (ABC) is false?

• A) Traditional systems are generally less accurate than ABC systems.
• B) ABC and traditional systems often produce different product cost information.
• C) ABC systems focus on activity costing while traditional systems focus on volume costing.
• D) ABC systems are generally less expensive to implement than traditional systems.

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Definitions:

Symbol

A sign or object used to represent an idea, concept, or entity.

Bayesian Theorem

A formula that describes the probability of an event, based on prior knowledge of conditions that might be related to the event.

Posterior Probabilities

Revised probabilities of events based on additional information.

Independent Events

Two events A and B where P(A ∣ B) = P(A) or P(B ∣ A) = P(B); that is, the events have no influence on each other.