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True or false: A traditional costing system uses more cause-and-effect relationships in tracing costs than does an activity-based cost allocation system.
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11 votes
11 votes
True or false: A traditional costing system uses more cause-and-effect relationships in tracing costs than does an activity-based cost allocation system.

User Yakov Dan
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1 Answer

28 votes
28 votes

Answer: False

Step-by-step explanation:

Activity based costing us when the activities of an organisation is classified. After the classification, the costs that are related to those activities will then be traced to the activities.

It should be noted that an activity-based costing system utilizes more cause-and-effect relationships when tracing costs than a traditional cost allocation system.

Therefore, the statement that's givenn in the question is false.

User Mr Baloon
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