Indirect costs allocated to products using activity-based costing are more accurate than traditional allocation systems.

Question

Quizplus · Accepted Answer

Activity-based costing (ABC) allocates indirect costs based on specific activities that drive the cost, resulting in a more accurate allocation of costs to products compared to traditional allocation systems that often rely on arbitrary methods. Therefore, it is true that indirect costs allocated using ABC are more accurate.

Indirect Costs Allocated to Products Using Activity-Based Costing Are More