alleryStart learning →Compared with conventional costing, ABC turns more of which cost into direct cost?
AIdle time cost
BIndirect cost
CDepreciation only
DMaterial cost
Answer & Solution
Correct answer: B. Indirect cost
ABC traces more overhead to products, so more indirect cost becomes direct.
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Related questions
In the CIMA description of ABC, activities are assigned to what?In which journal did Cooper and Kaplan publish ABC articles from 1988?Drucker said ABC also records the cost of what?What limits the use of ABC, especially in services?What is a danger of ABC, like other cost allocation approaches?The chief executive's salary stays unassigned in ABC. What are such costs termed?Why did indirect costs rise relative to direct costs in modern factories?How does ABC assign costs, rather than using broad arbitrary percentages?