Activity-based costing (ABC) is a term used to describe allocation methods that are based on cause and effect (i.e., charging costs to whatever causes them). Why is this more important to project managers using job-order costing than those using process costing?

A. Process costing is no longer used.

B. If a project manager is charged for costs used, such as equipment rental, resources tend to sit idle in case they are needed.

C. Job-order costing is used if the products or services sold are different enough to justify the additional cost involved in tracing costs to their cause. Charging all products or services a flat amount per unit shifts costs from those that cause them to those that do not.

D. If project managers are charged an in-house rate for resources that exceeds the rate charged by an external supplier, they will not use company resources that sit idle. Total costs then decrease.