Which of the following would be a reasonable basis for assigning the materials handling costs to the units produced in an activity-based costing (ABC) system?
A) Number of production runs per year.
B) Number of components per completed unit.
C) Amount of time required to produce one unit.
D) Amount of overhead applied to each completed unit.

Question

Quizplus · Accepted Answer

In an ABC system, costs are assigned based on activities that drive costs. The number of components per completed unit is a reasonable basis for assigning materials handling costs, as more components typically require more handling.

Which of the Following Would Be a Reasonable Basis for Assigning