Of the following,which is the best reason for using activity-based costing?
A)to keep better track of overhead costs
B)to more accurately assign overhead costs to cost pools so that these costs are better controlled
C)to better assign overhead costs to products
D)to assign indirect service overhead costs to direct overhead cost pools

Question

Quizplus · Accepted Answer

The primary objective of activity-based costing is to better assign overhead costs to products, which helps in determining the true cost of a product and can improve decision-making regarding pricing, production, and profitability. While tracking and controlling overhead costs is important, activity-based costing is a specific method used to achieve better product cost accuracy, rather than overall cost control. Assigning indirect service overhead costs to direct overhead cost pools can be a part of activity-based costing, but it is not the primary reason for using the method.

Of the Following,which Is the Best Reason for Using Activity-Based