Asked by Milan Golusin on Jun 18, 2024
Verified
Activity-based costing uses a number of activity cost pools, each of which is allocated to products on the basis of direct labor-hours.
Activity Cost Pools
Groupings of individual costs related to a particular activity, used in activity-based costing to allocate costs more accurately.
Direct Labor-hours
The overall hours that workers, who are a part of the manufacturing operations, put in.
- Grasp the complexity and structure of an activity-based costing system compared to traditional costing systems.
Verified Answer
AA
Althea ArticuloJun 23, 2024
Final Answer :
False
Explanation :
Activity-based costing uses a number of activity cost pools, but these are allocated to products on the basis of various cost drivers such as machine-hours or number of setups, not just direct labor-hours.
Learning Objectives
- Grasp the complexity and structure of an activity-based costing system compared to traditional costing systems.
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