Asked by Asona Fagan on Jun 05, 2024
Verified
Which of the following statements is true of activity-based costing?
A) ABC ignores the allocation of storage costs.
B) An activity cost pool collects costs related to the same activity.
C) ABC is more likely to result in big differences from a traditional costing system if the business makes only one product rather than multiple products.
D) Activities are the cost objects of the second stage of ABC.
E) ABC uses a single overhead rate.
Activity-Based Costing
A method of accounting where costs are assigned based on the activities and processes that contribute to the production of a product or service.
Activity Cost Pool
A grouping of all the costs associated with a particular activity, used in activity-based costing.
- Master the introductory concepts and numerical procedures linked to activity-based costing (ABC).
Verified Answer
JH
Jamison HermansonJun 07, 2024
Final Answer :
B
Explanation :
An activity cost pool is a collection of costs related to the same activity, such as setting up a machine or inspecting a product. Other statements are incorrect.
Learning Objectives
- Master the introductory concepts and numerical procedures linked to activity-based costing (ABC).
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