IIA Exam IIA-CIA-Part3 Topic 2 Question 87 Discussion

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

Question #: 87
Topic #: 2

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 Carin at Sep 06, 2024, 07:12 PM

Limited Time Offer

25%

Off

Get Premium IIA-CIA-Part3 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Wilda

2 months ago

Hold up, isn't the whole point of ABC that it uses multiple cost drivers to allocate overhead? Option B can't be right.

upvoted 0 times

Louisa

25 days ago

Pearline: I believe option C is the correct statement.

upvoted 0 times

...

Artie

29 days ago

User 3: So, which option do you think is true then?

upvoted 0 times

...

Pearline

1 months ago

User 2: Yeah, that's correct. Option B is not accurate.

upvoted 0 times

...

Fabiola

2 months ago

I think you're right, ABC does use multiple cost drivers.

upvoted 0 times

...

Sharita

2 months ago

Because ABC costing system provides more accurate product costing, not less accurate.

upvoted 0 times

...

Louis

3 months ago

Haha, yeah, I agree with Golda. ABC is all about getting more precise costs, not less. Definitely not option D.

upvoted 0 times

Katie

1 months ago

Yeah, ABC helps in assigning costs more accurately to products based on their activities.

upvoted 0 times

...

Dorathy

1 months ago

I believe option A is true. ABC is different from conventional costing systems in how it allocates manufacturing overhead.

upvoted 0 times

...

Tennie

1 months ago

I agree, ABC is all about getting more accurate costs for products.

upvoted 0 times

...

Adell

2 months ago

I think option C is correct. ABC can be used with both job order and process cost accounting systems.

upvoted 0 times

...

Starr

3 months ago

Why do you think it's D?

upvoted 0 times

...

Sharita

3 months ago

I disagree, I believe it's D.

upvoted 0 times

...

Golda

3 months ago

I'm not sure about that. Isn't the primary advantage of ABC that it provides more accurate product costing? Option D seems off.

upvoted 0 times

...

Izetta

3 months ago

I think option C is the correct answer. ABC systems can be used with both job order and process cost accounting.

upvoted 0 times

Magda

2 months ago

I think option C is also the correct answer.

upvoted 0 times

...

Magda

3 months ago

I agree, option C is the correct answer.

upvoted 0 times

...

Starr

3 months ago

I think the answer is C.

upvoted 0 times

...