Evaluation of the amount of costs incurred should be based on the actual volume of activity rather than the planned volume of activity.

Question

Quizplus · Accepted Answer

Evaluating costs based on actual volume of activity helps to provide a more accurate picture of the resources consumed and expenses incurred. Relying solely on the planned volume of activity can result in inaccurate cost estimates and distorted cost behavior patterns.

Evaluation of the Amount of Costs Incurred Should Be Based