An accounting system where costs are assigned due to the cause-and-effect relationship between costs and the activity that drives the cost is known as:
A) activity-based costing system.
B) net present value (NPV) system.
C) breakeven analysis system.
D) CAMPARI activity system.
E) cloud computing system.

Question

Quizplus · Accepted Answer

Activity-based costing system assigns costs based on specific activities that drive the cost, rather than just allocating costs based on a single cost driver such as labor hours or machine hours. It provides a more accurate picture of the true costs associated with producing a product or providing a service.

An Accounting System Where Costs Are Assigned Due to the Cause-And-Effect