The system that first traces costs to activities and then to products is called:
A) Direct Costing
B) Absorption Costing
C) Functional-Based Costing
D) Activity-Based Costing

Question

Quizplus · Accepted Answer

Activity-Based Costing (ABC) is the system that first traces costs to activities and then to products. It is a more accurate and detailed approach to costing compared to traditional methods like Absorption Costing or Direct Costing. Functional-Based Costing is not a valid term in accounting.

The System That First Traces Costs to Activities and Then