The use of which of the following costing systems is most likely to reduce cost distortion to a minimum?
A)Plantwide overhead rate
B)Departmental overhead allocation rates
C)Activity-based costing
D)Traditional costing system

Question

Quizplus · Accepted Answer

Activity-based costing is designed to allocate costs based on activities, which can provide a more accurate picture of the true cost of production. This system is likely to reduce cost distortion to a minimum, as it focuses on the specific activities that drive costs, rather than allocating costs based on broad categories like departments or production lines.

The Use of Which of the Following Costing Systems Is