alleryStart learning →Drucker said ABC also records the cost of what?
ASelling more units
BNot doing, as in waiting
CBuying new materials
DPaying bank interest
Answer & Solution
Correct answer: B. Not doing, as in waiting
Unlike traditional costing, ABC captures costs of not doing, for example the cost of waiting for a needed part.
Keep practising Total Absorption Costing
Browse all Total Absorption Costing questions for CA Inter, or explore more Cost and Management Accounting topics.
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?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?Broad overhead percentages on common costs risk what outcome among products?