Pqm201awhy Is Abc Cost Accounting Considered To Be More Accurate Than Direct Lab

PQM201A

Why is ABC cost accounting considered to be more accurate than direct labor based cost

accounting?

A. ABC is a new cost accounting technique that many defense contractors use

B. ABC identifies resource consuming activities and uses a valid cost driver (logical and/or statistical) for each activity

C. ABC meets all the requirements outlined in the FAR and the Cost Accounting Standards Board guidelines

D. ABC calculates an overhead rate for each individual cost center which is subsequently charged to each cost object

Prof. Angela

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