41) As compared to traditional volume-based costing using a single : 1876944
41) As compared to traditional volume-based costing using a single plantwide overhead rate, activity-based costing (ABC) is a more refined costing system that reduces cost distortion.
42) Traditional costing systems are generally more accurate than ABC costing.
43) It is easier to allocate indirect costs to the products that actually caused those costs if an ABC system is used rather than a traditional costing system.
44) Companies that use ABC trace direct materials and direct labor to cost objects just as would be done using traditional costing systems.
45) Two main benefits of ABC are (1) more accurate product cost information and (2) more detailed information on the costs of activities and the drivers of those costs.
46) The cost allocation rate for each activity is equal to the total estimated activity cost pool divided by the total estimated activity allocation base.
47) Facility-level activities and costs are incurred for every individual unit.
48) Unit-level activities and costs are incurred for every single unit.
49) The cost of inspecting and packaging each unit the company produces would be considered a facility-level activity cost.
50) Batch-level activities and costs are incurred again each time a batch is produced.