Companies using activity-based costing (ABC)have learned that costs are a function of:
A) volume and activities.
B) time and complexity.
C) volume and time.
D) resources and time.

Question

Quizplus · Accepted Answer

Activity-based costing is a cost accounting method that assigns costs to activities based on their use of resources, and then assigns the cost of those activities to the products or services that use them. ABC recognizes that the cost of a product or service is determined not only by the volume of production but also by the number and complexity of the activities required to produce it. Therefore, ABC determines costs as a function of both volume and activities. Choice A alone covers both aspects, making it the best choice.

Companies Using Activity-Based Costing (ABC)have Learned That Costs Are a Function