Trusted by millions of Kenyans
LoginRegister
Study resources on Kenyaplex

Get ready-made curriculum aligned revision materials

Exam papers, notes, holiday assignments and topical questions – all aligned to the Kenyan curriculum.

Browse exam papers
Or go directly to:
Class notes Holiday assignments Topical questions Other resources

Give the advantages of using Activity Based Costing (ABC)

Give the advantages of using Activity Based Costing (ABC)

Answers

Martin
i. A more realistic product cost is provided especially where overheads of factory forms
significant proportion of total cost
ii. More overheads can be traced to individual products based on the activities being undertaken
iii. ABC recognizes that its activities which cause overheads and it is product which consume
those activities; hence the overheads
iv. It provides reliable information for decision making
v. It is flexible to trace costs to services, products, customers etc.
vi. overheads are caused by volumes of output in some are caused by complexity and diversity of
products.
marto answered the question on March 4, 2019 at 06:12

Answer Attachments

Next: What factors should be taken into consideration before setting up a cost accounting system

Previous: Give the disadvantages of Activity Based Costing (ABC)

View more CPA Cost Accounting Questions and Answers  |  Return to Questions Index

Exams With Marking Schemes

Related Questions