Activity-based costing (ABC)can eliminate cost distortions because ABC:
A)develops cost drivers that have a cause-and-effect relationship with the activities performed
B)establishes multiple cost pools
C)eliminates product variations
D)recognizes interactions between different departments in assigning support costs

Question

Quizplus · Accepted Answer

Activity-based costing (ABC) eliminates cost distortions by using cost drivers that have a direct cause-and-effect relationship with the activities performed, ensuring more accurate allocation of costs.

Activity-Based Costing (ABC)can Eliminate Cost Distortions Because ABC