IIA Exam IIA-CIA-Part3 Topic 12 Question 75 Discussion

Actual exam question for IIA's IIA-CIA-Part3 exam

Question #: 75
Topic #: 12

Which of the following statements is true regarding activity-based costing (ABC)?

AAn ABC costing system is similar to conventional costing systems in how it treats the allocation of manufacturing overhead.

BAn ABC costing system uses a single unit-level basis to allocate overhead costs to products.

CAn ABC costing system may be used with either a job order or a process cost accounting system.

DThe primary disadvantage of an ABC costing system is less accurate product costing.

Show Suggested Answer

Suggested Answer: C

by Sabra at Apr 14, 2024, 10:44 PM

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France

6 months ago

I think B is the correct answer, ABC uses multiple activity-based cost drivers.

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Levi

6 months ago

I agree with Florencia, D makes sense because ABC is known for improving cost accuracy.

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Florencia

6 months ago

I disagree, I believe the correct answer is D. ABC provides more accurate product costing.

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Janessa

6 months ago

I think the answer is C, ABC can be used with job order or process costing.

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Gerald

6 months ago

I think D could be true because ABC costing requires more detailed data and can be more time-consuming.

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Rutha

6 months ago

I heard some people say that D) The primary disadvantage of an ABC costing system is less accurate product costing. What do you guys think?

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Glenn

6 months ago

I agree with ABC costing is flexible in that way.

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Tricia

7 months ago

I think the correct answer is C) An ABC costing system may be used with either a job order or a process cost accounting system.

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Ernie

8 months ago

Okay, so that leaves options C and D. I think C is the right answer. ABC can be used with either job order or process costing systems.

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Princess

8 months ago

Exactly. Option B is definitely wrong then. ABC uses multiple cost drivers, not just a single one.

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Malcolm

8 months ago

Woo-hoo, high five! I'm feeling good about this exam now. Bring on the next question!

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Lashawn

8 months ago

Seriously, that's just ridiculous. Okay, I think we've got it - the answer is C. Nice work, team!

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Roselle

8 months ago

Ha, less accurate product costing? What kind of answer is that? Whoever wrote this question must have a few screws loose.

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Arthur

8 months ago

Yep, that makes sense. And option D is wrong - the primary advantage of ABC is more accurate product costing, not less accurate.

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Silva

7 months ago

Yes, you're right. ABC helps in assigning overhead costs more accurately.

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Paulina

7 months ago

Option D is definitely wrong. ABC provides more accurate product costing.

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