Activity-based costing tries to identify the real costs associated with serving each customer.

Question

Quizplus · Accepted Answer

Activity-based costing is a method used to allocate overhead costs to specific products or services based on the activities involved in producing them. It aims to identify the real costs associated with serving each customer by tracing direct and indirect costs to activities and then to individual products or services.

Activity-Based Costing Tries to Identify the Real Costs Associated with Serving