Asked by BRANDI PRINCE on Jun 19, 2024
Verified
When designing an activity-based costing system, related activities are frequently combined to reduce the amount of detail and record-keeping cost.
Activity-based Costing
A costing method that allocates overhead costs to products based on the activities required to produce those products.
Record-keeping Cost
Expenses associated with maintaining accurate and comprehensive records of a company’s financial transactions and operations.
- Acquire insight into the procedure and obstacles in the construction of an activity-based costing system.
Verified Answer
MV
Maxine VincentJun 24, 2024
Final Answer :
True
Explanation :
Combining related activities can reduce the amount of detail and record-keeping cost, which is one of the advantages of activity-based costing (ABC) systems. However, it is important to ensure that the combined activities are still meaningful for accurate cost allocation.
Learning Objectives
- Acquire insight into the procedure and obstacles in the construction of an activity-based costing system.
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