As a Company Is Determining Which Costing System They Wish

Multiple Choice

As a company is determining which costing system they wish to implement, they will have a variety of methods from which to choose including Activity-Based Costing (ABC) and traditional costing. Which of the following would be considered a characteristic of a traditional costing system and not of ABC?

A) Being able to calculate the total cost driver for each activity through estimation
B) Being able to determine the departmental rate that the product or service passes through
C) Being able to serve customers by organizing costs into key activities
D) Being able to use each customer as a means to allocate customer service